The big wave of popularity came when Сryptopunks and Сryptokittens appeared in late 2017. After the appearance of cryptocurrencies, NFTs started hitting the headlines. They gained enormous popularity and halted the growth of the Ethereum blockchain. NFT is sold and bought online, often with cryptocurrencies, and shares the same coded software as many other digital assets.
Although NFTs have been around since 2014, they have gained popularity because of the ability to buy and sell digital artwork. In fact, between May 10 and June 10, 2021, $75,736,378 was spent on NFT.
NFT data cannot be destroyed because it is stored on a blockchain. Because the data is stored on a blockchain, it is fairly easy to trace the original owner without any third-party verification.
NFT is an investment tool that suddenly created dozens of millionaires, allowing people to turn anything into assets. To put it simply: NFTs are crypto-assets. It is not the same as cryptocurrency, which you can immediately withdraw and spend. It is some object that has been verified, is on the blockchain, and now belongs to you, which means you can sell it. Indeed, the cryptocurrencies are reliable means of conducting transactions on the blockchain. NFTs are different from them. A digital signature that each NFT has, makes it almost impossible to exchange NFTs for each other or to equate them to each other.
One of the pros of buying artwork is because it is the way you can support your favorite artists. Buying NFTs also gives you usage rights, now you can share this piece of art on the Internet (ex., post the image online, etc.) NFTs can also be a speculative asset, you buy them and wait until you can sell them in the most lucrative way for yourself.
How does NFT work?
Most NFTs are known to be a part of the Ethereum blockchain. Ethereum’s blockchain supports NFT, which stores additional information that makes them different from coins. Therefore, other blockchains can implement their own versions of NFT.
Anyone can create an NFT on an open blockchain like Ethereum.
What you can turn into an asset with NFT:
- Digital Art
- GIF (Nyan Cat, a 2011 GIF, was sold for nearly $600,000.)
- Basketball cards
- Art video series
- Virtual real estate
- Music
- Virtual fashion
- Tweets (Twitter co-founder Jack Dorsey sold his first tweet as NFT for more than $2.9 million.)
Is it worth it to buy an NFT?
Investing in an NMT is largely a personal decision. If you have some spare cash, it might be worth considering, especially if the item has value to you. But keep in mind that the value of an NFT depends entirely on how much someone else is willing to pay for it. So demand will determine the price, not the fundamental, technical, or economic indicators that normally affect stock prices and at least generally form the basis for investor demand.
All of this means that the NFT can be resold for less than you paid for it. Or you can’t resell it at all if no one wants it. NFTs are also subject to capital gains tax – just like when you sell stocks at a profit.
Where to Buy NFT?
NFT makes selling art a more democratic phenomenon. Now you can buy contemporary art everywhere. Popular venues include digital art exchanges such as Zora, Rarible, CryptoPunks, Opensea, and Foundation.
Popular marketplaces:
- Opensea is an NFT peer-to-peer marketplace. You just scroll through offerings and then create an account if interested.
- Rarible is an open marketplace that allows artists and creators to buy and sell NFTs. RARI tokens issued on the platform let their holders weigh in on features like fees and community rules.
- CryptoKitties is the ETH-based project that lets you collect and breed digital kittens. Each kitty has a distinct genome that determines its appearance and characteristics. While CryptoKitties isn’t a digital currency, it does offer the same security: each CryptoKitty is one-of-a-kind and 100% owned by you. It cannot be replicated, taken away, or burned.
- Cryptopunks was one of the first NFTs on the Ethereum Blockchain. In fact, some collections or single punks can be sold for more than $12 million. The CryptoPunks are a group of 10,000 distinctive generated characters. Each punk is unique, and each one can be officially owned by only one person on the Ethereum blockchain.
- Star Atlas combines gaming and NFTs to create a unique experience for its users. The NFT game project is launched on Solana and aims to combine blockchain and traditional game mechanics to create a personalized and attractive gaming experience.
- AXIE Infinity is a Pokémon-inspired universe in which anyone can earn tokens by playing skillfully and contributing to the ecosystem. Players can use their pets to battle, collect, raise, and build a land-based kingdom.
- Wax is a blockchain NFT marketplace or decentralized video game and entertainment network. They deliver a safe and convenient way to create, buy, sell and trade virtual items to anyone, anywhere in the world.
- The Sandbox is a platform inspired by Minecraft, there creators can monetize voxel ASSETS and gaming experiences on the blockchain.
When you decided to invest in NFS there are some projects that we suggest you keeping an eye on:
- Lil Moon Rocket. It is built on Binance Chain to issue NFTs and other “name rockets” tokens. It has an in-built “blind auction” system that manages project managers and initial competitors from buying the most desirable artwork in the early stages. After the completion of the smart contract, the complete artwork is revealed. Lil Moon Rocket sustains a consumer-centric approach as buyers (owners) can rename the artwork and co-create uniqueness with complete ownership. Thus, Lil Moon Rocket is one of the most popular NFT projects known for its unique blend of vector art and algorithm generation.
- CryptoKitties. It was already mentioned above as a marketplace and as one of the first to use the ERC-721 standard, which allows for unique digital assets. The interest in NFTs has seen a resurgence in interest in the game, which at its height in 2018 saw more than 1 million daily transactions.
- Enjin. It was founded in 2009 to develop a gaming network but in 2017, it launched its coin (Enjin Coin) and began developing a purpose-built blockchain ecosystem for NFTs. Enjin ended up being an ecosystem of integrated digital products, for trading and monetizing games. In March 2021, Enjin Coin had the highest market cap of all NFTs.
- Mooncats . MoonCats was launched on August 10th, 2017. The project originally allowed users to scan for the cats and rescue them using a process similar to Ether mining. After the tweet of one user on March 12th, 2021 about the project, all of the remaining cats were rescued within 3 hours. There are 13,400 assets on OpenSea with 2,900 owners and a 0.79 floor price.
5. NBA Top Shots is one of the top NFT projects owned by the NBA in association with Dapper Labs. It is built on the Flow blockchain unlike others built on Ethereum. On NBA Top Shots, users buy iconic NBA moments and own these digital collections forever.
The Future of NFT
Finally, let’s reason about the future of NFT. It includes applications in the growing field of decentralized finance (DeFi), where they can be used to display valuable assets such as works of art, rare collections, or even real estate as collateral for loans or financial contracts for insurance, stock options or bonds.
NFT promises to change the structure and nature of owning contemporary art or any other token, as well as the way we buy and sell. Following that, the income of those who benefit from the trade will also change.
With NFT, any asset can become “tokenized.” It’s the perfect copyright protection system. The chain of ownership of an object has always existed, but never before, could it be traced with such precision. And in the future, this could mean that the power over art will be taken out of the hands of intermediaries (ex., banks) and handed over to creators. Imagine a world where physical assets – real estate, luxury goods – are also labeled on the blockchain so that is the future of NFT.