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NFTs are everywhere, so we’re covering everything about NFTs in this article to give ideas and insights about it. We’re sure you’ve come across it numerous times while looking around online. And it’s likely you’re wondering what it is too.
Basically, NFTs have become a benchmark and focus in the eyes of a lot of people. And when we say a lot, we’re talking about the masses, singers, artists, and even sportspeople.
Because of this great interest and enthusiasm, even the world of cryptocurrencies continues to grow. It has even reached new territories; plus, new and innovative uses for it have started appearing as well.
Until recently, blockchain technology was mainly used for crypto trading. But with the appearance of NFTs or non-fungible tokens, these changed all of these. Now, let’s talk about what NFTs are.
NFTs are non-fungible tokens that represent a distinct item rather than fungible tokens. These tokens are considered a kind of cryptocurrency like Ethereum or Bitcoin. But unlike the usual coin in the Bitcoin blockchain, NFTs are unique and can’t be traded like-for-like.
This is a reason why they’re non-fungible.
NFTs are issued as ERC-721 tokens on the Ethereum Network and are needed to establish scarcity and verifiable digital ownership. Each of these represents a distinct object or a unique collection of limited edition items.
So what makes them more special than the usual crypto coins? It keeps additional important information that allows them to take the form of JPGs, videos, GIFs, MP3s, and more.
As we mentioned earlier, NFTs are cryptocurrencies that are entirely unique. They exist and are stored in the blockchain with a number of information contained in them. The information includes who the owner of the NFT is, when it was sold, who sold it, and more.
All the information that’s kept in the NFTs are encrypted, so you’re sure of its scarcity and authenticity. These are digital files that are verified with digital certificates. With that, NFTs have become a lucrative industry, especially in the art and gaming world.
When buying an NFT, you will receive a certificate that’s secured in the blockchain. This makes you the owner of that digital asset that you purchased. Remember, these NFTs can’t be substituted or replicated, and these can only have a single official owner.
Technically, these are transparent. So, no one can modify and alter the record of ownership or even copy/paste new NFTs as well.
And because of this distinct quality, the market of NFTs has grown extremely popular in recent years. Thus, has drawn numerous wealthy consumers since their appearance in 2014.
These are also known as exchanges, and this spot has specifically caught the attention of investors and collectors. Interestingly, even celebrities, investors, as well as chefs have taken an interest in the marketplace.
So with the growing popularity and attention to this specific space, artists took the chance to capitalize on opportunities. Here, they’ll sell their works at high prices to a couple of investors who would spend millions on a single NFT.
Aside from creators, the collectors have also created an opportunity with their new medium through online auctions. This allows them to have a better personal link between themselves and the creators.
Through this, content creators can also provide their works anywhere, and collectors can access global markets anywhere, virtually.
To know everything about NFTs, it’s best to know where it all began. Here’s a quick history about these NFTs.
The very first non-fungible tokens that appeared were Colored Coins. The entire concept of NFTs has been around since December of 2012. With that, the beginnings of Colored Coins had a hand in establishing the Bitcoin blockchain.
It came from the idea of delivering real-world assets (like real estate) on a blockchain.
Colored Coins are made from a bitcoin’s small denomination, and these can be as little as one satoshi. The latter is the smallest unit of bitcoin.
Colored Coins can be utilized to represent a number of assets while having numerous use cases. These include properties, coupons, subscriptions, access tokens, and digital collectibles. Not only that, but the capacity to issue your own cryptos, and issue shares of companies are included too.
The thing is, the scripting language of Bitcoin had limitations, and these were not enough to sustain the app. But despite this, the entire concept and idea of Colored Coins opened a lot of possibilities for experimentations. From there, a groundwork was laid out for successful NFTs to come.
Because of Colored Coins, a lot of people realized the huge potential of issuing assets to the blockchain. Yet at the same time, people also realized that Bitcoin itself wasn’t made to enable these additional features.
So in 2014, Counterparty was formed. It’s a p2p open-source online protocol/financial platform established on the Bitcoin blockchain. It allowed asset creation and even had a decentralized exchange.
Plus, it also sported a crypto token called XCP.
Counterparty included a couple of projects using its own assets. These include meme trading and card trading.
This year, the game creators of Spells of Genesis became the very first creators to issue in-game assets. They did this on a blockchain through Counterparty.
The creators of this application weren’t only founders for issuing in-game assets to a blockchain. They were also the first few to establish an ICO, also called crowdfunding.
Spells of Genesis launched a token called BitCrystals to fund the ICO’s development and was used as an in-game currency.
In August of this year, Counterparty grouped with Force of Will, a famous trading card game. They did this to launch their cards on the platform of Counterparty.
Force of Will was the fourth-ranked card game by sales. It only ranked behind popular names like Pokemon, Magic: The Gathering, and Yu-Gi-Oh.
It was an important event since Force of Will was a huge mainstream company. To note, they didn’t have prior cryptocurrency or blockchain experience either.
Their entry to the ecosystem motioned the value of including these assets on a blockchain.
By October of the same year, memes as collectibles were issued with Rare Pepes, the notable green frog on Counterparty. People started issuing Rare Pepes as assets on the Counterparty platform.
If you aren’t familiar, Rare Pepes is a meme that features a green frog character.
As Rare Pepe’s trading on Ethereum followed, two technologists created their own NFT project with a little twist.
The technologists Matt Hall and John Watkinson realized they could make distinct characters generated on the Ethereum blockchain. There would be a limit of 10,000 characters, and no two characters would be similar.
Their project was called Cryptopunks, in reference to Cypherpunks. In 1990, the latter experimented with precursors to Bitcoin.
The project launched the very first marketplace for rare digital art in the world. This was in October 2017 on the Ethereum blockchain.
The project’s creators displayed 10,000 various cartoon characters that could be claimed freely by anyone with an Ethereum wallet. All these were claimed quickly, thus inspiring a second marketplace. Here, collectors could trade the characters for increasing prices.
The NFTs for Cryptopunk were issued on hybrid ERC-20 and ERC-721 Ethereum tokens. That’s because ERC-721 wasn’t developed then.
What NFTs hit the mainstream is CryptoKitties. It’s a blockchain-based game that lets players raise, adopt, then trade virtual cats.
2017 was the year that marked the moment of mainstream NFT. It went viral and raised around $12.5 in investment.
Cats in CryptoKitties are breedable, have a distinct number and 255-bit of unique gnomes with DNA and varying traits.
Attributes like hair color, mouth shape, eyes, etc. are passed down to their digital cat offspring. During the height of CryptoKitty breeding/purchasing/trading, cartoon collectibles of these reached close to 5,000 ETH in volumes.
This project became extremely popular and led to an increase in Ethereum pending transactions. It accounted for more than 10% of network traffic on the network, thus threatening to crowd other applications too.
With that, Ethereum miners boosted the gas limit for more data per block, boosting transactions per second.
To support this occurrence, marketplaces such as RareBits and OpenSea appeared to support this.
And due to its popularity, CryptoKitties was even featured in the ZKM Center for Art & Media Karlsruhe. It was the main sample of blockchain used to create artistic collectibles.
Today, minting platforms for NFTs like Mintable and Mintbase, allows anyone with the right tools to mint their NFTs. The marketplaces for NFTs include OpenSea, which is the most prominent. Others are Super Rare, Nifty Gateway, Cargo Marketplace, MakersPlace, and Known Origin.
Creary and Cent are blockchain-based social networks that reward people for their multimedia portfolios of digital creations. The artists that are present share their works to get rewarded on the platforms. They’re donated with cryptocurrencies that act like tips.
There’s a market for purchasing or selling Tweets as NFTs via offshoots of the Cent platform, Valuables. Here, Tweets end up “tokenized” as NFTs verified and signed by the creator. It’s similar to autographed baseball cards and pictures.
The main purpose of playing video games is to have fun until the game is over. But today, a new form of playing games is emerging. It’s becoming an investment opportunity and potentially a method to earn a living.
These games that let you gain money are called play-to earn games. Examples of this include Axie Infinity and The Sandbox 3D, which has been exploding in popularity these days.
Unfortunately, play-to-earn games aren’t always free-to-play. Since these games are an investment opportunity like mutual funds or UITF, investing large amounts of money is a must. Otherwise, you won’t earn big.
Cryptocurrencies are naturally volatile and with that, the value of NFTs could suddenly spike up or spike down. Additionally, cryptocurrencies aren’t declared as stores of value, legal tender, or investment vehicle.
But that doesn’t mean NFT games aren’t legitimate. It’s only too risky to endorse these to the general public.
Of course, you can find yourself earning big while enjoying games as long as you do proper research. It’s the same with any digital purchase where you need to use critical thinking. It’s to ensure that the NFT is worth the purchase.
The NFT space is soaring and the online gaming market is a grateful participant of it. Today, more and more gaming projects are tokenizing their game assets that can be used in-game or traded for cryptocurrency.
Axie Infinity is the most known NFT game in the market today. Its value increased over twenty times last month, and currently, it’s looking at a billion dollars in value.
Initially, skeptics thought that the play-to-earn system wouldn’t gain momentum. However, the NFT space and crypto gaming is booming across the cryptocurrency industry.
Axie Infinity is a decentralized strategy game where users breed, collect, and trade character creatures called Axies. Its gameplay is similar to that of Pokemon where the game focuses on managing Axies to prepare them for battles.
Players gain SLPs or Small Love Potions after winning battles. These can be used to breed Axies and increase one’s NFT base. SLPs can also be bought from Uniswap or other decentralized exchanges.
Another thing that players can do with Axies, SLPs, and other NFTs in the game can be sold in the in-app NFT market.
Axie Infinity has around 5,000 new users and nearing $1.8 million volumes weekly.
The history of non-fungible tokens is a lot longer than people think. The first attempts in utilizing NFT happened in 2012, but NFTs are still in their early stages. Despite its massive growth in the past few years, the NFT space is still young and will continue to develop.
In fact, the NFT ecosystem will accelerate when more people & companies recognize the impact of NFTs. That’s because they will implement the use of non-fungible tokents. These will be crucial in developing the passion economy and will benefit both collectors and curators.
Developers will continue creating innovative uses, and interoperable items will completely change the NFT ecosystem. In several years, the NFT space will definitely have a lot of differences compared to what it is today.