Bitcoin was the digital asset that brought blockchain technology to the fore. Through the implementation of blockchain technology on Bitcoin, the world witnessed digital scarcity for the first time. This is one of the main features of Bitcoin’s blockchain, which enables it to prevent double spending or at least make it prohibitively expensive. The main problem for Bitcoin’s blockchain now, is fungibility. Given the characteristics of the distributed ledger, not every coin has the same history, therefore coins can be taken to be more or less valuable given their transaction history. Just imagine how much would a collector pay for one of Satoshi Nakamoto’s genesis coins?
A Problem for Bitcoin is a Source of Opportunity for Other Blockchain Projects
What constitutes a problem for Bitcoin, might be a blessing for others looking to create digital assets on a blockchain. A deliberate lack of fungibility can give rise to crypto-collectibles which might some day be on the same level as one of those genesis coins that Satoshi holds. This new wave of digital assetsis already being sold as ERC721 tokens on the Ethereum network.
Other Blockchains can Join the Crypto-Collectible Party
This phenomenon might not only be restricted to Ethereum – where we can already see the success of some crypto-collectibles like Crypto Kitties. Other blockchains might follow and other developers might develop different ERC721 tokens on Ethereum as well. The result could be a wide constellation of different digital assets within certain blockchains and across many networks that compete for uniqueness, based on the lack of fungibility, the unwanted characteristic on Bitcoin’s blockchain.
A Myriad of Opportunities
Just as Bitcoin was a proof of concept for blockchain technology, Crypto Kitties on Ethereum was a proof of concept for the advantages that a deliberate lack of fungibility can have. Through tokens that are deliberately not fungible, we are creating a layer on top of digital scarcity, making some tokens rarer and more desirable to niche consumers.
If kitties were such a hit on Ethereum, then anyone will be able to come up with the next big idea that will cater to other niche markets in a similar manner. The playing field is wide open, and once any person understands which niche he or she can cater too, the next batch of rare tokens will be created. The time is now ripe to take advantage of this opportunity and create unique tokens with style.