What are Non-Fungible Tokens (NFTs)? With most of the crypto world being caught up with Bitcoin and other bigger cryptocurrencies, there is one digital asset that has been quietly gaining popularity. The asset has been referred to as the future of the gaming industry, the art industry, and even the real estate industry! This asset is NFTs. They are able to draw in some serious cash with some pricing at hundreds of thousands of dollars. You might have never heard of them or seen them put to use, so keep reading and learn more about it!
What in the world is a Non-Fungible Token?
So before moving forwards, it is important to understand the concept of “fungibility”. The concept is very simple and it basically refers to items that you use everyday. You can think of these items being your physical money or even the bitcoin in your wallet! So now that you have a basic understanding of fungibility, what makes “non-fungible” tokens so special? Non-fungible tokens (NFTs) are basically a unique kind of tokens that are not interchangeable. The unique attributes of the token makes it impossible for them to be replaced or even exchanged. Most of these tokens are ERC-720 compliant which main use is for the storage of crypto-collectibles like art and gaming. The token helps to provide a means of authenticity and ownership. So, these tokens are basically token versions of real-world assets or even digital assets!
There are three crucial features of NFTs:
Each NFT has its own metadata which represents a piece of unalterable record.
With NFTs, the developers are able to create a limited or unlimited supply of a certain asset making it extremely rare.
NFTs can only be sold in whole and cannot divide into smaller pieces.
When did it get started?
Now that you have a basic understanding of the tokens, let’s talk a little history. NFTs basically gained its momentum in 2017 with the launch of the crypto game, CryptoKitties. As one of the earliest pioneers in this industry, the game allowed users to collect, store generic materials, sell and breed virtual cats. Interesting concept right? In December that year, CryptoKitties transactions on the Ethereum platform rocketed accounting for more than 12,000 transactions as a result of an increase in birthing fees for kittens.
So what makes it so exciting?
So there are three reasons why NFT is so exciting and useful. They have the potential to provide ownership for users which will authenticate their ownership rights. This would allow digital assets much more easier to move around. Another point is that it is transferable. NFT allows different items to transfer in different games to be exchanged. So this means you can use some items in other games you might play making it a completely connected network. Lastly, NFTs provide authenticity, it gives buyers confidence when they buy their assets. It is really important to note that rare NFTs can be BIG MONEY – like a one-of-a-kind diamond or painting!
Check out the car below to see how CRAZY these NFTs can be!
This above video shows a F1 Delta Time race car that sold for 415.9 ETH! Even though it didn’t beat this kitty (check down below) that sold for 600 ETH, it shows how valuable some of these NFTS can be.
Now, where do we use NFTs?
The use of NFTs in various markets is becoming more and more common. These include art, collectibles, gaming, virtual assets, real-world assets, and even identity!
The Pros and Cons of NFT:
How do you make NFTs?
NFTs have several different standards. One of the very first standards is the ERC-721, one of the cousins of the common ERC-720 protocol. The ERC-721 tokens are powered by a smart contract code that makes an asset unique and rare. They story this metadata can both online and offline. There are also other standards that help further the utility of NFTs. So ERC-1155 tokens can develop fungible and non-fungible tokens – this can help set the differences between rare items and items that everyone may own.
The Future of NFTs:
NFTs has already received recognition from a few big brands. These include Formula 1, Ubisoft, Vodafone, Nike, NFL, NBA, Samsung, Louis Vuitton, and more! This just goes to show how impactful NFTs can be and the limitless potential that it is capable of. Moving forward, more and more top-tier sports clubs are also planning to launch partnerships. So with the addition of new interactive platforms, these provide perfect opportunities for developers to test and experiment with Non-Fungible Tokens paving a way for more usages in the future.
If you look at the previous stats of NFT, you can see that it is on a continuous growth. The market cap of NFT is set for a 50% growth in 2020.
Following, if you look at the NFT player count, it is also set for a 30% growth in 2020.
You can definitely expect more growth with NFT and see more non-blockchain brands making their way into the world of NFT. Further improvements with NFT will also be necessary for mainstream adoption, all of this will take a matter of time. So stay tuned for NFTs and if you want to learn more about other crypto-related items, feel free to check out our other articles.