The year cryptocurrency started out with the introduction of Bitcoin. People never knew or even predicted that it would get to the level it is presently.
Digital currencies are now heavily invested in, and different currencies are now present, which makes bitcoin, not the only cryptocurrency. And they are all growing enormously as people continue to invest.
One of the hottest trends on the cryptocurrency market now is the NFT known as non-fungible token that has recently gained attention in the past couple of months despite its existence for a while.
This article will be giving an explicit explanation regarding things people should know about Non-Fungible Tokens (NFTs).
According to research, the non-fungible tokens started around 2013 – 2013 and only became conspicuous over the past month. Truly, nothing can remain hidden forever as the light will always shine on them at some point.
NFTs are now one of the recently known and popular crypto trends in 2021 and have a high probability of staying for a very long time due to its unique use case.
There are so many questions that will be popping up in the minds of those that have no idea of what non-fungible tokens is all about.
What are Non-fungible Tokens?
Non-fungible tokens (NFTs) are unique definitions of digital files ranging from art, videos, audios, programs, and other things related to creative work that are intangible.
These NFTs can also be used to track tangible assets like cars, houses, etc., – they are not interchangeable, which makes them unique.
non-fungible token helps in tracking digital assets, uniquely identifying the assets and proving ownership of the assets. It is much secured compared to the fungible, where users can freely trade but cannot prove ownership of the assets because it is interchangeable with other assets and cannot be uniquely identified.
NFTs allow for the transaction i.e., buying, selling, and trading of tangible and intangible assets items in a more efficient manner while curtailing any form of fraud.
This matters a lot in digital currencies like Bitcoin. The fungibility property rights allow people to freely trade cryptocurrencies freely without caring if it belongs to them. This is one of the major reasons why non-fungible tokens were created.
Non-fungible tokens are unique, which one of their outstanding characteristics is the ability to differentiate assets and provide metadata that will describe assets.
Bringing up a very good example, many people might not know about Decentraland. This is an opportunity to know about it. Decentraland is a gaming platform where virtual pieces of land are sold and can be acquired digitally, and owners can trade their piece of land as it is done in reality.
Non-fungible tokens are required to provide metadata that contains virtual coordinates and attributes of the land, like the percentage covered by grass on the land and the kind of building that is or has been constructed. Without the non-fungible tokens, this will not be possible.
The opposite being the fungible tokens are replaceable and interchangeable without any security of rights and uniqueness. Fungible tokens are easily replicated.
How is NFT different from Fungible Token?
NFTs have been structured to have limits. This makes them scarce and controlled. Users have a smart contract that entails the limit of the token they can get. They can get more tokens by increasing the total amount of supply within the smart contract. This is an algorithm that can either decide the possibility of the increase or if it will lead to prohibition.
NFTs do not give room for the creation of infinite assets to maintain rules, which makes them secure and more alluring to users. Each user can only define one asset at a time on a particular blockchain, and no one else can register on the same asset twice.
The general saying that whatever is rare is highly valued is the purpose of this. NFTs are valued because they have sets of rules guiding them.
NFTs use data notation like names and symbols to define and keep track of properties through their names, image URL, descriptions, etc. the universal resource identifier like JSON file needs to be provided in order to describe the NFTs unique properties.
NFTs cannot be separated, and there is no room for divisibility. It will make more sense to use bitcoin as an example. One can own a full bitcoin, but anybody with inadequate funds to buy a full bitcoin will have to go for the smaller denomination of bitcoin, known as Satoshi, which is 1/10 of full bitcoin.
In the case of non-fungible tokens, a bitcoin with NFT characteristics cannot be divided, and buyers will only be able to purchase one full bitcoin. This might seem unfavorable, right? Read further.
Fungibles are totally different and directly opposite to all these features.
Have NFTs Been Tested, or Are They Still a Theory?
The gaming industry is one of the industries that are benefiting profitably from the non-fungible tokens. NFTs for digital economies should be embraced, where digital files can be traded in a secured platform. Digital assets cannot be tampered with in the NFTs marketplace.
NFTs offer an opportunity of linking physical properties to decentralized identity, which gives true proof of ownership of houses and cars.
Many would love to know if these things are myths; well, here is some proof of projects that have been carried out using the non-fungible tokens.
As mentioned earlier, the decentraland is one of the projects where NFTs are used, a game that has virtual reality lands that can be bought and sold. The developers of this amazing virtual reality game can build or develop lands for owners and buyers and are carefully listed and kept in the metadata of the NFT user.
Another project is the NBA Top Shots, one of the most known platforms for non-fungible tokens built on the FLOW blockchain.
In this platform, various NBA games are recorded and copied into NFTs, and it has different tokens to maintain its uniqueness. As investors come into the market to own these NBA game moments, they have access to different moments. Some are captured in hundreds NFTs, while some are captured in thousands.
This platform is hyped, and each recorded NBA game attracts floods of eager investors waiting to grab them. This has made the platform rise interestingly as people queue on the waiting list.
The Cryptokitties is another project that we cannot simply elude. According to research, this was the very first project of NFTs that hit the mainstream media. In this platform, users collect digital crypto cats with default characters. Then through breeding the cats, they can create new cats and go further to discover new characteristics of the cats.
Have anyone heard of the game ‘God Unchanged’ or remembered playing it? This is another project of the NFTs. The game involved playing cards and exchanging with friends; some participants went the extra mile to list their cards on eBay, an e-commerce site, and other online marketplaces in order for them to complete their collections.
Recently, the crypto exchange WazirX launched the NFT marketplace for Indian artists, which was highly embraced and accepted and is seen as a great opportunity for development in the industry because Indian artists can now exchange their digital assets on a secured platform in order to be paid royalty.
This new development will make way for lots of opportunities, and artists, creators, or influencers can showcase their IP on a trusted system with dignity and connect with reliable buyers.
Artists in India and other countries of the world that have embraced NFTs can now secure their royalty which would have been difficult traditionally where they would have to go through an elongated litigation process to get such royalty.
NFTs help facilitate unique viewing or experience of exclusive content from creative persons like musicians, artists, actors, and actresses, etc., and it represents a sort of legal rights to properties.
Another very popular use case of NFT is the F1 Delta game that is a blockchain game licensed by Formula 1, in which NFT items like parts of cars in the game can be purchased or sold in the game.
The OpenSea Marketplace for NFTs is another good example of where NFTs are auctioned. In this platform, NFT is allowed to be displayed and the OpenSea is positioned to be the decentralized marketplace. All trading and transactions take place through something called a smart contract. The OpenSea Marketplace allows up to about 200 different types of NFTs to be traded on the platform, including Ethereum domain names, SuperRare art, and some other NFTs listed above Cryptokitties, Gods Unchained cards, etc.
Some marquee use cases like NBA Top Shot recently allow people to own basketball’s captivating moments by owning NFTs of the NBA highlight clips. The most known form of non-fungible tokens appears in digital images and videos.
Wondering how NFTs came to the limelight?
People buy something they know that they are the sole owners of the said digital item. The originality and authenticity attached to it make people want to trade on the NFTs Marketplace.
And the value attached to the NFTs is not just about, but selling also comes with greater value than the initial amount the owner bought it.
It is known that value is a shared belief, right? The NFT value depends on how much money one is willing to pay for it. The value of NFTs is not inherent to the object itself. It has been assigned by the people who rate it valuable.
People are always looking for the next big profitable thing to invest in with the hope of having high returns on their investment. Bitcoin is undisputedly the king in the cryptocurrency world and has become relatively too high and mostly affordable by major banks and investors. And as a result of this, retail and low-income investors are always endlessly searching for the next place to invest, and NFTs seem promising.
Non-fungible tokens are programmable using smart contracts, and this helps greatly in automating a variety of old manual transactions that are not secured or private.
Just as in bazaar auction sales, when an item is placed on auction, the more people bid the price, the more value it gets, the more the price and worth increases. The values of NFTs explode like the Beeple’s first 5,000 days where NFT sold up to $69 million.
This was one of the most fascinating transactions in the NFTs, followed by the auction of Jack Dorsey’s first-ever tweet, which was valued at the price of $2.9 million.
With all these explanations, so many people will be attracted to the non-fungible tokens and will be eager to know how they can acquire it. Here is a detailed explanation of how to purchase NFTs.
One thing that makes the NFTs be rising at a fast pace is that it is easy for people to get what they want once they have the money because it stores things like basketball or baseball cards, game parts, paintings, and other digital files in the form of tokens on a blockchain.
It is noteworthy to state that there are few marketplaces that are popular, and these marketplaces are known to have volumes of NFTs. This article will contain two markets.
The First is the OpenSea marketplace, where buyers need to connect with MetaMask, an ethereum ERC-721 compatible wallet. On the platform, users can find different trending collections, and they can see the price of each NFT until the last minute when the auction is completed.
Buyers usually go for the first available NFT, which is the Wrapped MoonCat. All the information required is revealed, including the price history, the creator of the NFT, the description, and the current price.
There are two options, buyers can buy directly for the listing price by making an offer, if it is accepted, the price will be deducted from the buyer’s account, and the buyer will receive NFT for the ethereum (ETH).
NFT is truly unique and aims at eliminating fraud. People seeking to solely and uniquely own digital or physical items using digital blockchain can go for NFTs. It is now being adopted by realtors that deal with everything real estate. Real estate transactions can now be digitally registered.
They are totally different from fungible assets and currencies like bitcoin, where anyone can interchange them.