‘What is this NFT craze all about?’ Every day as we begin to scroll through our feeds, we are bombarded with buzzy terms like – NFTs, Blockchain, Crypto, NFT crypto, etc.
You probably have come across some of the recent headlines – Beeple sold a purely digital artwork as an NFT for $69 million, or ‘Jack Dorsey selling his first tweet over the platform as an NFT’, and ‘popular memes like the Disaster Girl and Overly Attached Girlfriend becoming NFTs’ and the list goes on.
The game developers have already started to see NFT’s as ‘an important part of the future of the game industry.’ Still very recent, the NFT market has boomed in 2021 with tradings worth $ 338 million, that added growth of 705% from its worth three years back. By the end of 2021’s 2nd quarter, the industry was already over $2.5 Billion in sales volume.
During the pandemic, the crypto market ballooned in manifolds with NFTs, taking baby steps towards the investment world.
But before heading further, let us consider a scenario.
Sarah is a singer who wants to hold an online concert. Being a very talented singer, composer and songwriter had put a lot of effort into holding the concert. But she is well aware of how her original pieces can get stolen over the internet and thus, is quite sceptical of her decision. In such a dilemma she stumbles upon the idea that ‘buying NFTs for all her original pieces will give her the primary authority and ownership rights over her work’.
No matter how fascinating it sounded to her, the entire concept of NFT was quite alien to Sarah, just like any of her peers.
So…What is NFT Market and HOW can Sarah maintain her ownership rights with them?
If you find yourself in that wandering crowd, then my friend, you are not alone.
Fungible And Non-Fungible Assets
Anything we buy or sell can be broadly classified under these two categories.
Fungible means something that can be exchanged or substituted for the same value every time. They can be Physical or tangible Fungible assets, which will include the dollar, rupee, gold, casino chips etc. Or they can be Digital or intangible Fungible Assets like Bitcoin, Ethereum etc.
Non-Fungible assets, on the other hand, includes the assets that cannot be substituted or exchanged. They are one-of-a-kind assets and has unique attributes that make them different. Non Fungible assets can too be something physical like a painting or can be digital non-fungible assets like crypto kitties, digital collectables etc.
What are Non-fungible tokens (NFT)?
According to Wikipedia, “NFTs are a kind of non-fungible token that is a unique and non-interchangeable unit of data stored on a blockchain, a form of digital ledger. NFTs can be associated with reproducible digital files such as photos, videos, and audio.”
Simply put, NFTs are unique non-interchangeable units of currency that can act as a digital certificate of authenticity to verify the ownership of such non-fungible assets. The data of the history of ownership of that asset is secured safely on the Blockchain.
The Blockchain, on the other hand, is a decentralised digital ledger. No single person owns the blockchain, the transfer of control and the decision-making authority resides within a distributed network. Each member in that network has a copy of the same data in the form of a distributed ledger.
Are NFTs completely alien to us?
Have you ever taken the hobby of collecting rare comic publishings, baseball cards or physical art? If you have, then you probably understand the thrill about possessing something that ‘no-one-else’ has. Humanity has always been curious about the idea of collectables, or in other words, collecting something unique. But till now, it has always been very physical to us.
NFTs simply proposed a new twist, by making those collectables entirely digital ie., through NFTs we can acquire the ownership rights of digital assets only.
When did it all start?
CryptoKitties was one of the earliest applications of NFTs. It was a digital blockchain game on the Ethereum Network, where the developers created scarcity for the game assets. The original cat collectable of the game, called CryptoKitties, was created by only a few in numbers. The users were allowed to buy, breed and trade those collectables. Once the craze for the game skyrocketed, there arose a scarcity for that asset.
Do you know? Those cute digital felines now sell for over $100,000.
Since then, the NFT model has been applied to various video games where the players can add incentives and reward their time spent on the virtual games through buying and trading digital assets, and this was all made possible with the blockchain gaming market.
Is NFT(s) the future?
The world is slowly progressing towards complete digitalisation, and we are right in the middle of such a development. It would be fascinating to witness firsthand how the versatility of NFTs could unfold in various sectors of art, gaming, finance etc. in the future.
At this point, when the NFTs are just getting started, the inevitable future of it seems unfathomable. The future of NFTs is much more than just collecting ownership for digital art, memes, GIFs, video clips etc. It could be anything from concert tickets to mortgaging cities, to building a community or metaverse and owning digital assets within the metaverse.
Major companies have realised its potential and have started building within this space. The idea of a decentralised ecosystem is gaining momentum in various sectors of Gaming, Real Estate, Metaverse etc.
With potential benefits providing room for growth prospects and value preservation, it is high time we realise the significance and learn about the ‘future of a new digital economy.