NFTs are bad news.
Bad news for someone who prefers pirated content.
Bad news for someone who feels creativity cannot ever go digital.
And bad news for someone who believes owning something exclusive is always about actually holding it in person.
Welcome to an eccentric era where the concept of collectibles isn’t offline anymore. Thanks to NFTs or Non-Fungible Tokens.
- Non-Fungible Tokens are the future of art.
- NFT collections can comprise images, audio, Gifs, videos, and anything creative
- Owning an NFT is like owning bragging rights to the actual digital asset that sits somewhere on the web.
- NFTs are creator-specific, good to flip in the long term, easy to buy, easy to store, and do not have set values that can be manipulated.
- NFTs follow the ‘For the People, By the People’ approach.
- Any Metaverse example you look at has NFTs to buy
- MANA, SAND, and GALA are the newest and highly anticipated NFT-relevant tokens
- ENJ and CHZ are also credible NFT movers, which act as currencies in their respective blockchains
- Uniqueness, being the first, credible ownership history, and real-world benefits determine the current and future value of NFTs.
What the Heck is an NFT?
For the unversed, the concept of an NFT can be hard to decipher. Well, not because it’s out and out technical, but the fact that someone would talk at length about something physically non-existent is a bit hard to believe.
So to make things simpler, we would be using analogies throughout.
But first, let’s start with an actual definition. An NFT is an exclusive piece of data that redirects the owner of that piece to a specific server or location on the web. And, this address can store an image, Gif, music video, or anything that is ‘ART’.
The original entity stored in the server has the creator behind it, who determines whether the collectibles change or what the entire NFT bundle offers.
Therefore, if you know someone who has recently owned an NFT, do understand that they haven’t actually bought the stuff made by the creator. Instead, only the bragging rights to the entity were purchased, and the creator is still in control of the artwork, regardless of what it might be.
Confused? Well, here is an analogy that we promised.
Imagine Chris Hemsworth (Marvel’s Thor) launches his NFT collection, comprising exclusive deleted scenes from Thor: Ragnarok. Therefore, if you end up bidding and purchasing the NFT, you actually get access to a data piece and a password to access it, which redirects you to the scene repository. Chris Hemsworth still controls the content, offerings, video timings, and everything else.
NFTs: Fad or Fab
If you have read the above analogy carefully, you might feel that an NFT is a mere fad as there is no point just getting a feel of provenance and not the entity itself. And when it’s just a piece of data, it can even be hacked or stolen. But this is where things get interesting, making the Non-Fungible Tokens the force they are today.
NFTs are hosted on a Blockchain, and that is what makes them insanely desirable. Yes, owning an NFT might mean owning a piece of data, but the same is verified and recorded in the blockchain ledger, making you the rightful owner, and that too with credibility and proof.
Note: Even if someone takes a picture of the NFT image you own, they can only view the same as the Blockchain ledger still has you as the rightful owner. And even if you have flipped the NFT, your association with the concerned piece of digital art remains well detailed on the Blockchain ledger.
And when it comes to the restricted nature of ownership, it’s more like ‘Power without Accountability. This means you have the most rights to the piece of art, and you also need not worry about maintaining the server health and the keep the collection secure, which the creator needs to be mindful of.
Why the NFT Craze in Unreal?
NFTs might sound inconsequential to some, but the digital asset space has surged, contrary to popular belief that they are doomed to fail. And there are several technical aspects that have justified the raging NFT market.
Physical art pieces do not attract recurring payments. And in most cases, they can be sold only once unless we are dealing with an autographed set of original pictures and books. NFTs, however, change this by being Blockchain-adhering entities. This means NFTs can use the Smart Contract feature of Ethereum or any other compatible blockchain to ensure that every time an NFT is sold or even flipped, the creator gets some royalty credited.
Did you know that only five top NFT collections have brought close to $300 million into the market over the past week? Sounds insane, right! Well, that is exactly how popular NFTs are, and this rage is a reason why investors are purchasing the best ones with plans of flipping when the popularity increases.
No two NFTs are similar in value, and at any given time, the value of an NFT is what people think of them. This Non-Fungible nature adds to the NFT popularity as these digital assets are more like people-driven art forms, catering to people who actually value them.
Easy to Buy
Interested already? Well, you can pick NFTs of your choice from specific marketplaces. However, it is important to note that buying NFTs requires you to use the Blockchain-specific currencies, which can either be ETH (as most NFTs are Ethereum-backed) or any other platform-relevant cryptocurrency like MANA for Decentraland, GALA for Gala Games, and more.
Easy to Store
Have you been where NFTs can be stored after bidding successfully for them? Well, you just need to head over to secure software, hardware, or a web wallet that is secure enough and lets you store the address and password leading to the collection.
Metaverse and NFTs: Understanding the Connect
Metaverse isn’t a fleeting, audacious term anymore. Instead, it is a virtual or rather a digital reality where purchases, concerts, lands, and other resources are available just like they are in the real world. But the question is, how are NFTs linked to Metaverse. Read on to know.
Specific metaverses like the Decentraland act as VR marketplaces, built on the Ethereum blockchain, by and for the users. And in this marketplace, NFTs can be created, dealt in, monetized, and even flipped using the native MANA token.
And guess what, the 7-day Decentraland-relevant sales volume concerning digital assets and NFTs stand at $6.6 million.
Similarly, the Sandbox, the famed Voxel platform, also lets users get hold of NFTs and other digital assets using the native SAND token.
And NFTs across these marketplaces have been gathering a lot of popularity even now when Metaverse is still far from being mainstream. Just imagine where the NFT craze with head once Metaverse is globally adopted? Food for thought isn’t it!
Top 5 Tokens to Deal in NFTs
As mentioned above, NFTs are quite easy to buy. However, for a long time, ETH (Ethereum) has been the crypto asset of choice for bidding in and purchasing NFTs, as most were hosted on the Ethereum blockchain itself.
But then, with the Metaverse growing and different marketplaces and VR platforms making their own NFTs available, here are some of the tokens that might be used extensively in the days to come. Especially for getting hold of new and exclusive collectibles.
Native to the Sandbox ecosystem, SAND is one of the few NFT-relevant tokens that allows users to own, build, and even monetize their gaming and digital asset procuring experiences. And if you have been playing those 3D games on the Sandbox platform, having SAND handy can let you share and build resources or even vote on important platform-specific decisions.
Fact Check: Quite recently, Adrian Cheng, a property tycoon based out of Hong Kong, has built some virtual land in the ‘Sandbox’ metaverse platform.
Synonymous with the Decentraland blockchain, MANA is an ERC20 token used to purchase LAND NFTs and other digital assets on this marketplace. And even creators on Decentraland can use MANA to develop virtual structures, experiences, theme parks, and other entities.
Firstly, Gala Games is yet another Ethereum-backed platform with GALA as its native token. And secondly, it is a breeding ground for blockchain games where NFTs are sold, purchased, and traded using the GALA token, especially to influence game launches, purchase in-game items, and other decisions.
And what’s interesting is that all of the three tokens are now listed on CoinSwitch, and if you are into NFTs and Metaverse, do check these out before the prices go berserk.
Coming back to the original discussion, here are two of the other NFT-focused tokens that are making several heads roll:
Relevant to the Enjin ecosystem that helps users create and load digital assets, the ENJ token is used to pay for building websites and other NFTs. And every digital asset relevant to this blockchain is also tokenized via the ENJ crypto.
On the Chilli blockchain, the CHZ token is used as an exchange for specific NFTs. And most importantly, the CHZ token is based on the ERC20 protocol and also gives voting rights relevant to the Chiliz ecosystem.
Apart from these extremely popular and raging NFT-relevant crypto assets, you can even take a look at other NFT-driven offerings like AXS (Axie Infinity) and Theta (Theta Network) if you want to have a better understanding of the NFT space.
What gives NFT value?
As mentioned, no two NFTs are alike. And with the NFT space being accommodative towards new players with pseudonyms, it is necessary to keep an eye on a few NFT metrics to consider purchasing them in the first place.
And to better understand this, let us revisit the first analogy that we discussed, i.e. Chris Hemsworth and the NFT collection of Ragnarok’s deleted videos.
So here are the important factors that actually lend value to the NFTs.
Is it the First?
Any collection, when launched exclusively, generates a massive value surge. If you aren’t getting this, consider Jack Dorsey’s first every tweet that was sold as an NFT for a bomb. And, yes, it was the first tweet ever and, therefore, will keep holding the value of exclusivity.
An NFT is expected to hold and generate value if it includes real-world benefits. Now coming to the speculative NFT launched by Chris Hemsworth as an extension to our analogy.
While the collection is expected to hold only the deleted videos, imagine if Chris suddenly adds a yearly meet-and-greet session as an add-on for all the NFT holders.
Well, this will translate into some real-world benefit and make the price go bonkers!
And yes, an NFT is expected to do wonders for the investor or holder if it’s unique in the first place. And to be honest, Jack Dorsey’s first tweet will forever be a novel NFT idea.
A reputed creator can only do so much for the value of an NFT. As the Blockchain ledger showcases the ownership history, if a reputed celebrity holds the NFT before it changes hands, the prices might go through the roof.
Well, that’s pretty much all about NFTs. And if you carefully read through the entire discussion, you will realize that the concept of NFT is certainly the future of digital art, collectibles, and ownership. And while it might still look like a fad to some, it is a fab and novel idea that will keep generating recurring revenue for the creator whilst keeping the ownership space transparent for all.
And with the Metaverse slated to become a reality, NFT-relevant tokens, exclusive virtual marketplaces, and entire virtual worlds with lands to purchase are going to fit in just right.
Did you find this piece interesting enough? Read and learn more about other relevant Crypto Concepts at CoinSwitch.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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