Explaining SFTs - Can They Really Be Used As Cryptocurrencies & NFTs?

Explaining SFTs - Can They Really Be Used As Cryptocurrencies & NFTs?

2021-10-23 | Eddy Morgan

Explaining SFTs - Can They Really Be Used As Cryptocurrencies & NFTs?

Normal fungible tokens, such as Bitcoin, are available. This signifies that one is identical to the other. Then there are non-fungible tokens (NFTs), such as the Bored Ape collection or Beeple's digital artwork, which sold for a whopping $69 million. Then there are semi-fungible tokens (SFTs), which are tokens that can be used in both realms. In comparison to cryptocurrencies and non-fungible tokens, the notion of SFTs is still in its infancy. The fact that the token starts out as a fungible asset and then converts into an NFT is what sets it apart. Consider the following scenario. You went out and bought a pen, which you kept in your pocket. It's fungible right now. It is possible to replace one pen with another of the same brand. However, an hour later, you can command it to transform into a feather quill that remembers that it was formerly a pen and where it was purchased. That's pretty much how a semi-fungible token (SFT) works nowadays, especially in the blockchain gaming world. When it comes to SFTs, they are currently minted on the Ethereum blockchain and function as per the EIP-1155 standardization. In comparison, the EIP-20 standard is used for fungible ETH tokens and EIP-721 for non-fungible tokens. The ability of an SFT to act in a variety of ways has opened up new possibilities for how cryptocurrencies might be employed. SFTs have limited applications right now, but they're gaining traction in a world where NFTs are raking in millions of dollars for developers. A fungible item is one that can be replaced with an identical object with no discernible difference in functionality. Fungible items include a pair of ten-dollar bills in your wallet, three copies of the same computer file, and ten identical milk packages. Non-fungibles, such as your car or pet dog, are on the other end of the spectrum. They have distinct identifiers that distinguish these items as–of–a–kind–memory or behavior qualities that distinguish them.

Leave a comment

Your email address will not be published. Required fields are marked *

Top 7 cryptocurrency overview

Best trading tool for cryptocurrency

2022 Top cryptocurrency Price Prediction List