A Beginner's Guide to NFTs

Steam, a popular video game platform, has a Community Market where in-game items can be bought and sold. Steam’s marketplace is centralized and collects a transaction fee of 5% for each item from the buyer.

Traditional assets like equity getting tokenized seems like a clear progression in the future as it would make transferring them far more efficient. Then we’ll see tokenization that bridges the traditional world but adds new possibilities such as advertising space represented as an NFT where you could sell advertising rights to a site and have that... See more

Non-fungible token (NFT) is a term used to describe a unique digital asset whose ownership is tracked on a blockchain, such as Ethereum. Assets that can be represented as NFTs range from digital goods, such as items that exist within virtual worlds, to claims on physical assets such as clothing items or real estate.

NFTs can make fractionalized ownership more accessible, so if there is a valuable item that otherwise wouldn’t have been accessible for someone to own, now they can own a piece of it. Custody of a physical item still requires a trustworthy custodian, but being able to issue, hold, and trade it as a cryptoasset unlocks more use cases. One can also c... See more

NFTs can cover an extremely wide variety of areas given they are simply digital representations of ownership but there has been significant growth within art and gaming in particular.

One concern with making in-game items tradable is that the ability to trade items can negatively affect the gameplay as people are focused on extracting value from the system or only the players that are willing to pay a lot of money for items can enjoy the game.