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most common types of non fiat tokens

NFTs, or non-fiat tokens, are the new kid on the crypto block but don’t let that fool you. NFTs have a vast potential for businesses and investors alike. They offer a more secure way of issuing digital assets and represent a future where cryptocurrencies and digital assets aren’t treated separately.

NFTs are essential to the end of blockchain-based financial technology (fintech). Cryptocurrencies have been around for less than ten years, but they’re already changing how people think about money and business. For instance, thousands of altcoins are now released daily, with new ones. Other fintech companies use NFTs to their advantage instead of ignoring them as other blockchain platforms do.

What Are Non-Fiat Tokens?

definition of non fiat tokens
Non-fiat tokens

Non-fiat tokens are digital assets that are not issued by a central authority. Instead, they’re created and governed by the community via a decentralized blockchain. They can be decentralized apps (Dapps), security tokens, utility tokens, investment tokens, debt tokens, or even crowdsale tokens.

NFTs are a potential replacement for fiat money and traditional financial products and can be a decentralized version of stocks, bonds, derivatives, money market funds, and even insurance. Furthermore, they can represent real-world assets, such as property titles and equity ownership.

Why Are Non-Fiat Tokens Necessary?

importance of non fiat tokens
Is NFT \necessary?

Non-fiat tokens represent a safer, more secure way of issuing and trading digital assets. Smart contracts oversee them, so there’s no risk of fraud. You also don’t need a banking license to give them as you do with fiat money. Furthermore, there are no borders when trading non-fiat tokens. That means you can use them across any country and financial institution.

List Of The Eight Most Common Types Of Non-Fiat Tokens

types of the most common non fiat tokens
Types of NFT
  • Equity token. Equity tokens represent ownership of real-world assets. For example, a real estate asset could mean a piece of property or a share in a real-world corporation. 
  • Debt tokens. Debt tokens let investors receive monthly interest payments or repay a debt. 
  • Commodity tokens. Commodity tokens represent ownership of tangible assets. For example, a token for a specific type of fruit could represent the right to purchase that fruit in the future. 
  • Service tokens. Service tokens represent access to a service. For example, you could buy tokens to park at a parking lot for an agreed-upon price per hour. 
  • Asset tokens. Asset tokens represent ownership of an asset. For example, a token representing a specific art piece could be traded like other stocks. 
  • Real estate tokens. Real estate tokens let people exchange ownership of real-world assets. For example, tokenizing a house with an apartment inside could let people buy and rent out the house without owning it. 
  • Game tokens. Game tokens represent ownership of a game and the right to participate in revenue generation from the competition. For example, a game where you collect water from a well could have tokens to purchase the water from the well. 
  • Crowdfund tokens. Crowdfund tokens let people fund projects like crowdfunding campaigns. You could use tokens to invest in a project without actually contributing money.

How To Issue an NFT in Blockchain

how to use an nft in blockchain
Use of NFT in blockchain

You could issue an NFT using a blockchain platform like Ethereum or NEO. You’d need to create a smart contract and create an ERC-20-compatible token. You can also give an NFT on open-source blockchain platforms, such as Bitcoin, EOS, or any other blockchain with a token standard.

For example, you could issue equity tokens on the Bitcoin blockchain. You’d create a token smart contract and issue ERC-20 permits. You’d also need to find a respectful exchange.

How to Spend Non-Fiat Tokens?

uses of non fiat tokens
Spending NFT

NFTs are more secure than traditional fiat money but can’t be used only as money. They have additional characteristics that make them useful for more than just trading. For instance, equity tokens can represent ownership of real-world assets, debt tokens can repay loans, and utility tokens can power a platform.

Benefits of Non-Fiat Tokens

benefits of non fiat tokens
Benefits of NFT

– Lower fees. With no go-between, costs are lower for issuing, trading, and using non-fiat tokens. That makes them more cost-effective than traditional financial products.

– Better liquidity. A liquid market means NFTs are more fluid than traditional financial products, so that you can sell or trade them immediately. That makes them more liquid than conventional financial products.

– Better accessibility. Traditional financial products are only available to those with bank accounts. That makes them more accessible than conventional financial products.

– More transparency. Non-fiat tokens are more transparent than traditional financial products. That makes them more transparent than conventional financial products.

– More globalized. Traditional financial products are usually tied to one country, but non-fiat tokens are more globalized. That makes them more globalized than conventional financial products.

Conclusion

Non-fiat tokens are the new kid on the block. They’re safer, more secure, less expensive, and more liquid than traditional fiat money. But don’t let that fool you. Non-fiat tokens have a vast potential for businesses and investors alike. They offer a more secure way of issuing digital assets and represent a future where cryptocurrencies and digital assets aren’t treated separately.

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