When Satoshi Nakamoto was bringing forth Bitcoin and all the possibilities along with it, he never would have been able to foresee that the world would one day buy digital art, Cryptokitties, celebrity music, Hashmarka etc. Similarly, it can be a little difficult to keep up with all the new array of usage and dazzling possibilities that cryptocurrency investing presents to us on a daily basis.
Since the cryptocurrency boom of 2020, we have encountered the many highs and lows of Bitcoin along with the explosion of the meme-inspired Dogecoin; which is now held by many analysts as one of the best investments of 2021, there are innumerable other sectors in cryptocurrency investing and blockchain technology, that are being explored every passing day!
One of the important blockchain assets that are now being explored extensively is the NFT or Non Fungible Tokens markets. This particular sector has taken the art world by storm! And it is no exaggeration. Read along to find all the basics of NFTs, which took the help of Ethereum blockchain- ERC-721’s help in creating NFTs and making NFTs transferable, possible.
What are NFTs or Non-Fungible tokens?
Non-Fungible might sound like something that we will come across while studying biology, but no, it is not. Let us break it down in layman’s terms to understand it better. Non-fungible tokens are digital asset that represents real-world objects like art, music, in-game items, and videos. They can be bought and sold online. NFTs are generally encoded with the same underlying software as cryptos.
NFTs can also be described as a cryptographic token that uniquely defines an asset.
NFTs can also be described as a cryptographic token that uniquely defines an asset. They can be used to represent digital assets which are in the form of images and also can track real-world assets like a house or a song for example. As these NFTs make the assets unique, i.e. there can only be one of any NFTs, which gives one to prove ownership over the said asset and prove the authenticity of the ownership.
To take a better approach, let us take a fungibility example. The fungibility property matters the most for digital currencies like Bitcoin. Having this property allows people to freely trade Bitcoins with each other as it doesn’t matter which Bitcoin you own.
However, if we apply the fungibility aspect to the digital assets, that would mean users can freely trade them, and there is no proving of ownership of the asset as they are interchangeable with any other asset. That is a problem if we want to uniquely identify assets. It is for that reason that non-fungible tokens have been created.
What are the characteristics of Non-Fungible Tokens or NFTs?
Now that we have understood what makes NFTs important, let us take a look at what makes them so desirable.
It is the uniqueness of the NFTs that makes it so desirable. They allow one to define an asset uniquely by providing metadata that describes the asset and also sets it apart from other assets.
For example, Decentraland sells virtual pieces of land. And to uniquely define each piece of land, the metadata of the organization consists of virtual coordinates and the properties of the land, such as the percentage of land that is covered by grass or what buildings it has within.
Scarcity, or being rare is what makes these NFTs so popular. Each one of them is unique to one another and the developers of each NFTs have control over how many tokens they want available. If they want to limit an NFT to 1,00,000… it is doable. Later, if they change their mind and create more, all they have to do is just increase the total supply within their smart contract. That is it.
One limitation that works in favour of the Non-Fungible Tokens is that they cannot be infinitely created. Rarity takes care of making it a one time chance to introduce one NFT to the blockchain. These characteristics not only make it so popular and unique but also makes it so desirable for collectors.
This also makes sure that no one else gets to register the same asset twice into the system. This also makes sure that the assets also remain rare, as long as they have value for people. Getting back to our example of Decentraland, one can own a piece of land in the game and trade it as one would trade an actual land.
The best feature of NFTs? IT cannot be divided. If you own an NFT, you own 1 whole NFT. To give you one more example, you can buy one whole bitcoin, but if you cannot buy 1 BTC at the moment, you can start investing in 1/10th of a BTC (each block of bitcoin is known as satoshi) and in time own a full Bitcoin.
Just as you cannot buy half of a book, you cannot buy half of an NFT. So, if Bitcoin had non-fungible characteristics, you would only be able to buy 1 whole Bitcoin.
How to make your own NFT? Steps to making own NFTs.
Firstly, there is no need for one to have prior or in-depth knowledge in cryptocurrency to be able to create their own NFTs. NFTs can be made by using two tools only; a crypto wallet and Ethereum.
Also read: All about Ethereum.
The steps you need to follow:
- Set up an Ethereum Wallet
- Purchase a small amount of Ethereum
- Connect your Ethereum wallet to an NFT Marketplace
Top 8 NFT Marketplace of 2021:
|Hic et Nunc|
Top 5 Collectibles & NFTs Tokens by Market Capitalization
|Name||Price (14 May 2021)||Market Cap|
|Enjin Coin||$ 2.10||$1,668,537,719|
Crazy NFT Success Story
Trevor Jones, a 51-year-old artist, attended college in his thirties and had to work 2 to 3 jobs to support his painting career. Until he used augmented reality to transform paintings at the Scottish National Portrait Gallery into crypto bigwigs. He is now one of the most important artist minting NFTs.
As the hype around NFTs keeps gaining momentum, Trevor Jones is the one who stands out as a classically trained artist in the digital world. He has also broken multiple crypto art records and has topped the highest bids on non-fungible token (NFTs) marketplace that includes the likes of:
- Nifty Gateway
In February 2021, his Bitcoin Angel set a record for the “most expensive open-edition NFT artwork” when it ranked in $3.2 million.
Read his story in detail, here.
NFTs for the Indian Mass
According to experts, NFTs is a new concept in India and will take some time for this trend to get popular here.
However, an immediate application of NFTs could be in protecting the intellectual property rights of Indian artisans. “India has lakhs of traditional artisans who could benefit from using NFTs to verify their original work. Add to that the growing number of artists working in digital media who can protect their creations with a tokenized “wrapper” to show that it’s an original work,” said Rahul Pagidipati, CEO, ZebPay.
The crypto exchange is planning to become the first Indian company to launch an NFT, which will be named ‘Dazzle’, which is the name for a herd of zebras.
“Since we announced the Zebra non-fungible token and Dazzle platform for digital art and collectables, we have had several galleries and organizations reaching out to us. The NFT market in India, like the global market, is just beginning to take off and looks even more promising than it did six months ago,” Pagidipati said. Source: Mint