NFTs, also known as non-fungible tokens, are among the most promising sectors in the crypto industry. In this article, we will cover everything you need to know about NFTs.
What are NFTs?
NFTs are digital assets that include identifying data listed in smart contracts. This data makes each non-fungible token unique, which prevents replacement by other tokens. There are no NFTs that are alike, so these cannot be swapped one for another. In contrast, Bitcoin is a fungible token. You can exchange Bitcoins, although their value might vary depending on the rate. Fungible tokens are divisible so that you can receive or send amounts smaller than one Bitcoin. As a rule, NFTs are not divisible. Nevertheless, recently investors introduced the concept of fractionalized NFTs. NFTs possess unique attributes and often are connected to a specific asset. In contrast, fungible tokens are identical and possess the same attributes and value when exchanged.
The use and functioning of NFTs
NFTs prove their value and scarcity and can be differentiated from each other. These can be anything from virtual land lots to art and ownership licenses. NFTs can be purchased and sold on NFT marketplaces. The most popular marketplaces are Rarible and OpenSea, although many leading crypto exchanges started to dominate the industry. This year, Binance introduced its own NFT marketplace, while Coinbase stated its plans for an NFT marketplace and created a waitlist.
ERC-20 tokens, which are Bitcoin and Ethereum-based, are fungible. The tokens that are non-fungible use Ethereum’s token standard ERC-721. Moreover, NFTs can be created on other blockchains which are smart-contract-enabled and have NFT tools and support. In addition to the most widely used blockchain for NFTs Ethereum, some other blockchains support NFTs, namely Solana, Tezos, NEO, EOS, and Tron.
NFTs and their smart contracts facilitate the storage of such attributes as an owner’s identity, metadata, and secure file links. The important instance of NFTs is that they can prove digital ownership. The challenge, however, is that NFTs, smart contract technology, and their protocols are still in the process of being developed. The creation of decentralized platforms and applications for the creation and management of NFTs is still quite complicated. Another challenge is the creation of a standard. The development of blockchain is fragmented, as most developers are focused on their own projects. Unified protocols and interoperability are required for successful implementations.
If you choose to use NFT marketing services, you have a great chance to see your project skyrocket in value. Here is the collection of extremely successful NFT projects; yours could be one of them.
This project was launched in 2017, which made CryptoPunks among the earliest NFT projects created. It was developed by Lavra Labs studio. CryptoPunks is a collection of thousands of 24×24 pixel art images that depict punks with various attributes. Initially, this project was released for free, but today these artworks cost huge amounts of money. The rarest punks sell for millions of dollars. CryptoPunks are used for “flexing”, or in other words showing off membership of an exclusive community where owners use this art as avatars on social media platforms. This trend has become so popular that Twitter even has plans to verify NFT avatars to avoid people using saved images as the real deal. And it is not all, as Lavra Labs has signed the contract with United Talent Agency as they plan to extend their reach to television, film, video games, etc.
Bored Ape Yacht Club
Similar to CryptoPunks, Bored Ape Yacht Club is a collection of NFT avatars; this time, these are nonchalant looking apes. Just like CryptoPunks, there are thousands of artworks with a set of attributes and a thriving community around them. This project offers to its enthusiasts a ticket to an exclusive club that provides perks for its members. It is true because if you own a Bored Ape NFT, you become eligible for releases of additional NFTs like Mutant Ape Yacht Club and Bored Ape Kennel Club.
NFTs have a wide variety of applications, and representing digital objects in video games is one of them. Axie Infinity is the biggest NFT video game around these days. The trading volume of this most traded NFT collection amounts to $2.5 billion at the moment. This gameplay features collecting adorable monsters Axies, putting them in battles, and breeding them to get new Axies. The game is “play to earn,” and some players make a living from breeding and selling Axies. However, starting playing the game is not cheap, and one requires hundreds of dollars to assemble a team.
The potential of NFTs
Currently, the attention around NFTs is focused on artwork, crypto, and gaming collectibles. There is an uprise of licensing content for NFTs among recognizable brands. For gaming, NFTs are used to represent such in-game items as skins that have the potential to be ported to new games or traded with other players. Their potential is much wider; possible use includes intellectual property rights, ticketing, and trading of movies, music, and video games. For instance, earlier this year, Zero Contact, the thriller film, pioneered as the first movie released as an NFT.
Numerous possibilities have become accessible for crypto enthusiasts around the world. If you are interested or have an idea that awaits its embodiment, you can always contact us, and we will tell you more about our NFT marketing services.