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The NFT industry has grown from a market cap of $30 million in 2017 to over $300 million by 2020. This guide will help you to learn more about non-fungible tokens.
Ever since digital currencies began to gain popularity in the financial industry, the focus of the crypto community instantly rested on Bitcoin and other digital currencies. Surprisingly, this course of the event came with a silver lining, an innovation that would introduce another interesting class of digital assets, which would take the world by storm. Their name is non-fungible token.
A non-fungible token (NFT) is a special digital crypto asset that provides special services and cannot be traded with other tokens. This is quite different from digital currencies like Bitcoin and other similar assets which can be interchanged for one another. In other words, this asset usually takes trades on unique electronic collectibles such as virtual art and images, in-app-purchases, or other forms of digital assets on the web.
The advent of these NFTs can be dated back to 2012 with the induction of Bitcoin2x. They are also known as Coloured coins and they came in with the developer’s intent to embed the token onto the blockchain and the most popularly adopted Non-fungible Token is the ERC721 which works on the Ether ecosystem.
Special tokens are also designed for online gamers on the network to process payments and purchases. The unique properties of each token make it unequal in value or characteristics to other available tokens and they are all assigned a separate hash to identify them uniquely.
The need to claim ownership to innovations spurs from the growing value of the intellectual property which may soon be replicated or reformed and drops drastically in value.
A non-fungible token refers to a group of cryptographic tokens that can be used to symbolize assets that are not very common. Simply put, they are everyday assets or virtual assets that have been tokenized. They play so many roles, including verifying proofs of authenticity and ownership. Due to their inability to be interchanged, scarcity is no longer a stranger to the digital world.
Non-fungible tokens are designed to work on unique requests based on the specification of the owner which may include encrypted files or data, it is mostly used by CryptoKitties and Decentraland platform on the Ether blockchain to enable smart contracts.
The potency of the non-fungible tokens prevents copyright infringement in this smart age. The state of the art security offered by digital coins can therefore be induced into claiming sole rights to any property.
One major problem faced by the introduction of NFTs to the blockchain is that the technology is very well still in infancy and thus, the creation of decentralized platforms constantly runs into complications as well as meeting up with quality control.
This problem might seem much more difficult to overcome as blockchain development is quite tedious and assigned to several developers thus affecting the unity of protocols and their effectiveness.
There are several fraudsters out there, looking to prey on the struggling artist, stealing and selling to the highest bidder. With NFTs, Artists can create, develop, and safeguard their work, as well as freely showcase it on the internet without fear, as the intellectual and property rights are secured via the blockchain network.
NFTs have provided a potentially endless source of collectible items, with digital versions of celebrities available for purchase. There have even been talks of integrating valuables like signed merchandise from popular people available for purchase.
Popular gaming establishments prevent gamers from transferring items to friends and teammates via the service, but vis NFTs, they can be easily given and received, and possibly used in some other similar games.
The blockchain game which was scheduled to debut in August on the WAX blockchain was developed by Travis Wright and Joel Comm, following months of deliberation. The idea behind the game is to feature fifty superheroes – all of which will be selected by top investors, on several cards, each card having a unique design.
The cards are to be designed with different degrees of availability, with the more rare cards being the most valuable.
This is the second most expensive non-fungible token sold last year. This was one of the most prized areas up for grabs on the virtual space, with the area having a monetization feature. It was eventually sold for 44% of the initial asking price, totaling to around $81,000.
Decentraland is like Minecraft. It comes with exciting games and art galleries, which are used to display NFTs.
$Yachty is a token created by American rapper Lil Yachty. Its sales took place on Fyooz, a social money platform, where buyers purchased the token at the sum of $15 each. It took just 21 minutes and 41 seconds to sell out the token, which amounted to the sum of $375,000. Lil Yachty promises that his venture into the crypto world is to provide his fans with more awesome experiences.
Over the coming years, it is expected that several traditional brands begin to invest and operate in Non-Fungible Tokens as a means of expanding their reach and maximizing profits. The gaming sector is expected to make the first major break-in, with rumors of deals with established blockchain firms constantly appearing on the web.
Non-fungible tokens are exceptional because their users are not required to interact with the underlying blockchain technology. However, this does not hinder them from enjoying the numerous benefits of the technology, thereby making NFT projects well-positioned for mainstream adoption.
Cryptocurrency and blockchain is the next big thing, which is why millions of investors worldwide are seeking expert opinions and putting money into it with the hope of reaping rewards. It should however be noted that Non-Fungible Tokens are a relatively new concept, and as such, there will be several crashes of various sectors in the years to come.
The NFT industry has grown from a market cap of $30 million in 2017 to over $300 million by 2020, a massive 1000% increase in just 3 years. However, it is generally advised to not invest money that one cannot let-go-of in the case of failure. Those with low-risk tolerance should stick to more popular and established digital currencies that have encountered and overcome several challenges along the way.