Kenetic: Non-fungible ERC721 tokens are a “quantum leap”
It's all about creating a unique, one-of-a-kind digital one and only.
Ethereum is a game changer for many reasons. It was the first platform to lay out the concept of smart contracts and bring it to life, and since then it has been breaking new ground in the concept of platform ecosystems. A large part of this is thanks to its proliferating standards.
The best known is probably ERC20, the Ethereum platform token standard. If a token meets this requirement it can typically be moved along the Ethereum blockchain with ease and held in similarly compatible wallets. Making sure a token meets ERC20 standards makes life a lot easier for developers who then don't have to worry about building their own wallet from scratch, or handling the myriad finnicky elements of decentralisation because they can just run on the Ethereum mainnet instead.
Other standards have also been proposed.
ERC725 and ERC735 are a set of proposed identification standards, which refer to the extent to which an individual user's identity has been verified. For example, ERC725 compliance might be good enough for someone to get onto an online game (is not a robot, is over 18, for example) while ERC735 compliance might be enough for formal financial services (is not a money launderer, terrorist or robot).
There is also ERC721. This is a proposed standard for non-fungible Ethereum tokens.
- Fungible: One fungible item of one type can be exchanged for another of the same type without losing value. Money is fungible because all $10 bills of the same type, for example, are worth just as much as each other.
- Non-fungible: Collectable items which derive their value from uniqueness, such as CryptoKitties. Most collectables are non-fungible because they cannot be freely exchanged while retaining the same value across the board.
“NFT’s (non-fungible tokens/ERC-721’s) unique assets and collectables are the next generation of Blockchain value," says Jehan Chu, Co-founder and Managing Partner at Kenetic Capital.
"From Cryptokitties to Codex, they represent an entirely new asset class and a quantum leap in how we quantify and interact with the world around us in a decentralised way. Developers, investors and professionals should be actively engaging this exciting new space."
It's a relatively well-known but little-tapped area of cryptocurrency, which has so far focused on creating an easy medium of fungible exchange such as bitcoin, and then slowly started giving way to unique collectables.
Chu is speaking mostly in the context of blockchain-based gaming, where non-fungible tokens may stand to hold some real entertainment and monetary value. The notion of gaming items holding value has been long apparent, with people sometimes paying hundreds or even thousands of dollars for purely cosmetic gaming items, and sometimes reselling them for even more.
To discuss how to best tap the potential of this space, Kenetic is joining others at the NIFTY conference and hackathon in late July 2018.
Topics for discussion at the conference will include the opportunity for NFT (non-fungible tokens), crypto games, token standards, overcoming the barriers between platforms (mobile, desktop, etc) NFT economies, blockchain intellectual property, security and project funding.
Alongside the conference itself, the hackathon focused on building blockchain-based games will be held on the afternoon of July 25th, with prizes worth more than US$15,000 being distributed.
"As blockchain continues to revolutionize the gaming industry, we are eager to welcome hundreds of enthusiasts to discuss, debate, and celebrate what’s next for this flourishing sector. Hosting the first-ever Blockchain Games and NFTs Hackathon is something we are truly excited about, and we look forward to meeting all the talent that this event will attract," said Decentraland CEO Ari Meilich.
Blockchain games might not sound like the most valuable application of the technology, but it holds a lot of promise and much of it is centred around the "quantum leap" of non-fungible digital items. Big names like Google, and many others, have previously noted the potential of non-fungible tokens as one of the most game-changing elements of blockchain technology.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, NANO