Do you NFT?
by Shiju K S on March 23, 2021
As Wall St. and Silicon Valley rapidly adapt to and expand the usage of cryptocurrencies in general, and Bitcoin specifically, a creative side of crypto has emerged that is not only fun to play with but also holds the power to transform Social, gaming, and the financial markets –Non-Fungible Tokens or NFTs as is the lingo
In the following 4-part series, we bring you the Why, the What, the When, and the Hows of NFTs. Considered to be the wild west of blockchain and the crypto world until very recently, NFTs have seen some real action in the past year. For the first time, digital creators and online users can move digital items outside of their original environments, leverage sophisticated trading capabilities like auctions, bidding and more in a marketplace. Moreover, they can sell in any currency, likestable coinsandapplication-specific currencies as well.
A Non-fungible asset is like any asset that you own, a phone, handmade deskplanter, an old guitar or like in the case of Jack Dorsey, his first tweet. Non-fungible digital assets have existed since the dawn of the internet like domain names or social handles. In-game items purchased through digital currencies (in-game coins) are all non-fungible digital assets too. These just differ in their interoperability, tradeability, and hence their liquidity.
This is where blockchain provides a coordination layer for digital assets such as art in the form of a jpg, png, or audio clips and adds several unique properties to non-fungible assets. NFT standards, such as Ethereum, allow NFTs to move easily across multiple ecosystems, viewable inside different wallet providers, tradeable on marketplaces, and, in the most recent and exciting application, displayable inside of virtual worlds.
This interoperability of the NFTs is perhaps its most exciting feature. This opens up NFTs for free trade on open marketplaces that represent a transition from a closed economy to an open, free-market economy. Now digital artists, musicians, and game developers, brands can let free markets do the heavy lifting and do what they do best – create, while building a truly loyal follower and fanbase that wants to feel connected and take ownership!
From Farmville to Fortnite, people spend a fortune on in-game purchases. Building unique online personas and avatars has been a long-time allure for the gaming community and money has never been a hurdle. But when they quit a game, that money is gone. NFTs are the game-changers. The users, after they stop logging in, can take their digital assets out of the game and sell what they purchased. This will change the whole nature of e-games and sports as it won’t be about spending anymore, but about investing.
CryptoPunks, one of the first NFTs, are 10,000 unique collectible characters with scarce traits and qualities — are now roughly $18,000 apiece, with Punk 4156 selling for a jaw-dropping 650 Ethereum, roughly $1.15 million at today’s prices. In real-world terms that are similar to the auction price of rare Mike Trout rookiebaseball card. As bigger names across industries host their first NFT drops, think Grimes, Mike Shonda, Nike, NBA TopShot, are turning the focus of millions of their followers noticing crypto and NFTs for the first time.
The enormous success of NBA TopShot, a digital take on collectible basketballcards, which surpassed $100 million in sales, five months after going public to a worldwide audience, has given greater exposure to a wider pool of buyers. We are seeing the birth of a new class of digital assets as NFTs will dofor unique digital assets what the ICO boom of 2017 did for cryptocurrencies by way of instantly liquid tokens.
NFT marketplaces that cater to the creator, professional as well as amateur, and the buyer, both seasoned and the novice by enabling instant tradeability of non-fungible tokens will help create more value and higher liquidity.
Hold my coffee, while I go sell my Fortnite skin!