2021 has so far been an odd year. If the once-in-a-generation pandemic event isn’t strange enough, life in the digital tech sphere has added even more spicy storylines. We’re seeing a shift from a traditional approach of economic staples to digital alternatives being taken seriously. Amateur investors have taken on the Brick & Mortar Wall Sreet banks, coining the phrase “meme stock” and showing that the meaning behind the name “Robinhood” really gives people a platform to take from the rich give to the poor. Bitcoin has proven that it’s not just the next trendy thing in tech as big-name banks jumped on the bandwagon, and companies such as Tesla & PayPal backed the cryptocurrency in a big way showing that it can be a genuine store of value. Finally, Non-fungible Tokens (NFTs) have challenged the art world. If a solid yellow and blue striped painting can be sold for $46.5m and classed as art, why can’t we do the same for pixelated pictures of cartoon heads? It turns out we can and there are some NFT startup projects that are doing just that.
There is a lot of buzz around NFTs, which have exploded this year. First coming to light around 2012, they have since become extremely popular with online digital collectors and content creators looking to get in and make a quick and tidy profit. This year we’ve seen some NFTs being sold for millions, turning amateur designers into multi-millionaires overnight. Businesses are now starting to take note with NFT marketplaces becoming the place to become part of this new trend and pick up some digital collectibles.
A non-fungible asset is like a piece of art; for example, it is unique. You can’t trade one Mona Lisa for the same one.
What Is A Non-Fungible Token (NFT)?
In its simplest terms, a non-fungible token (NFT) is a digital asset (an asset is a store of value or something that will bring you value in the future, whereas a liability causes you to lose money). However, the real determining factor in NFTs is what makes them non-fungible. A fungible asset is something that can be replicated and easily interchangeable. Bitcoin is a fungible asset since it can transfer owners easily. If you trade one Bitcoin for another, you’ll have the same thing.
However, a non-fungible asset is like a piece of art; for example, it is unique. You can’t trade one Mona Lisa for the same one. The NFT market essentially provides NFT owners with a unique digital piece of artwork where ownership of the NFT is recorded on the ethereum (eth) blockchain. Ethereum is another type of Cryptocurrency, similar to Bitcoin & Ripple. However, the Ethereum blockchain allows the storage and transfer of most NFTs being traded today.
Think of a baseball trading card convention. Thousands of people attend and trade unique baseball cards. Some sell their cards for cash. The cards in this sense are NFTs; they are unique and being transferred either for other unique cards or for cash. However, every time there is a transaction, it is recorded on a ledger that states exactly what was transferred, how much, and who is now the new owner. This ledger is the blockchain.
Taking the trading card example online and turning it into the NFT marketplace, where instead of physical cards, we have digital ones, and instead of a ledger, we have the blockchain and instead of cash, we use ethereum.
Where Can You Find NFT Marketplaces?
So how can you get involved and jump on the hype wagon? Well, first, you’ve got to create a piece of art that you think someone might want to purchase. This could be anything from a music clip, dance video, tweet, or gif. You can get as creative as you wish with NFTs, so long as it’s unique.
Next, it’s time to add it to the blockchain-based unique digital NFT marketplace. The most popular platforms are;
- Nifty Gateway
- Dapper labs
- Atomic Market
While OpenSea proudly announces itself as the largest marketplace since it offers a diverse range of non-fungible tokens, including art, trading cards, and collectibles, you can get similar experiences on other platforms. A considerable advantage of OpenSea is that it allows artists to add NFTs to the digital ecosystem without writing a single line of code. Ideal for artists who want to enter the game but don’t have the technical skillset to code.
Rarible, on the other hand, is a community-based platform that holds the ERC-20 Ethereum token. This is important since the ERC-20 is a significant Ethereum token that has emerged as the technical standard. Used for all smart contracts on the Ethereum blockchain, it provides a list of rules that all Ethereum-based tokens must follow. This provides a certain level of stability and uniqueness to the platform since users can be sure of specific standards & a smart contract being employed.
OpenSea and Rarible are by and large the two most popular NFT marketplace platforms. While the others still offer rare media, these two platforms provide a low entry barrier for anyone interested in getting started buying and selling digital items.
If Jack Dorsey, the CEO & founder of Twitter, can sell an auto-graphed tweet, then there is no limit to what NFTs can achieve
Why Use The Ethereum Blockchain?
Isn’t Etheruem a cryptocurrency? Yes, but Ethereum is more than just a transfer of value; the technology it is built on is where the real value of NFTs comes from. Blockchain technology. Etheruem’s decentralized blockchain allows for a smart contract to provide a standard protocol for exchanging digital assets, tokens, and crypto.
What We’ve Seen So Far With NFTs
In short, multi-million dollar deals all across the world. From digital art to cryptokitties, virtual land to digital collectibles. Big names, including the NBA, Post Malone & Logan Paul, have all jumped into the NFT land to release digital assets or artwork they’ve created. The NBA top shot, for example, is a collection of video clips released by the NBA of historical moments in the sport’s history. One particular Lebron James dunk recently sold for $208,000!
Christie’s, the famous auction house, has also started accepting and selling digital assets and currently holds the record for the most expensive piece of NFT artwork sold at $69,346,250.
Can’t you download the image on google images for free?
Technically you can, but the difference is, you don’t own it. It would be the same as printing a copy of the Mona Lisa from your computer and putting it on your wall. It may look the same and do the same job, but it’s not the original copy. This is where the Etheruem blockchain comes in.
Where Are NFTs Going?
A very open-ended question and the sky is the limit. If Jack Dorsey, the CEO & founder of Twitter, can sell an auto-graphed tweet, then there is no limit to what NFTs can achieve. The real value is in blockchain. As far as the history of blockchain, the technology is still very much in its infancy. Yet, during its short life span, we’ve witnessed the value of Bitcoin soar to over $60,000/coin with talk of it being a better store of value than gold to now watching NFTs tackle the art world. The full features & potential of blockchain are still being figured out. Still, the decentralized capability, value range, and ability to break into finance and data transfer provide users and businesses to look into the future with awe and opportunity.
While NFTs continue to defy the odds on what it means for artists and what it means to create and sell art, it is clear that digital collectibles must be providing a real cause for concern for traditional art collectors, worried that NFTS are encroaching on their space. The modern art world looks overvalued, with seemingly blank canvases selling for millions of dollars. Could NFTs and the ethereum blockchain invade such a marketplace and allow virtual assets, games, and land to create a new kind of valuable ecosystem?
With this, let’s consider 10 NFT projects worth following right now.
10 NFT Projects To Follow Right Now
Cryptokitties: Collect, Breed and Trade Virtual Cats
One of the original NFT projects and an excellent place to whet your appetite when it comes to NFTs. Created by Dapper Labs and existing on the Ethereum blockchain (where else), the company allows for users to collect, create, purchase and even breed virtual cats or Cryptokitties – don’t you love 2021!? Cryptokitties, along with Cryptopunks, has become one of the most well-known NFTs with some selling for multiple six figures.
Decentraland: A Virtual Reality Platform
Owned by users, Decentraland allows users to purchase parcels of land to develop their environments and application. While Decentraland is listed in the games category, don’t be surprised to learn that the range of abilities that users have inside the platform extends to selling land.
NIFTEX: This Startup Makes Fractional Ownership Of NFTs Possible
Niftex is a marketplace to buy/sell rare tokens, specifically ERC-20 fractions. This startup makes fractional ownership of NFTs possible. This is good for creators and buyers alike in the token world since it allows for the cost of rare NFTs to be shared. Fractions or “Shards” enable users to trade NFTs to lower costs with greater diversification, reducing their risk when investing.
Codex Protocol: Registry for Unique Assets
Codex Protocol is a verification website that allows owners & artists to verify and register their digital assets. The platform works by allowing its users to verify a collectible’s authenticity by viewing its provenance—its identity and ownership history. Features like this could provide more authenticity around the decentralized ecosystem by providing reliable data about the exchange of digital assets sold.
Ark Gallery: Additional Tools To Enhance Liquidity For The Original Non-fungible Token
While not only allowing collectors to enhance their liquidity, Ark Gallery focused heavily on Cryptopunks – a set of collectible characters at a limited bit rate. Cryptopunks are arguably the most recognizable set of NFTs available today, so it’s no surprise that one startup is piling its resources to concentrate on this area of media. Ark Gallery centers on Arks, Smart Contracts that purchase Cryptopunks. Like Niftex, the idea is to bring together multiple collectors to share the cost and risk of buying rare and expensive Cryptopunks.
Rare Bits: Buy, Sell and Discover Crypto Assets
Slightly different from our other startup projects since Rarebits is a peer-to-peer marketplace for crypto goods. User can find, purchase, and sell unique items which are all unique on the blockchain for zero fees! A small company, established in 2017, Rarebits has several investors’ backing, so there is potential in the project.
Mintbase: A Platform That Makes It Easy To Mint A Non-fungible Token.
Minting essential means creating NFTs. All this talk of an NFT and we’ve not shown how they’re made. Since it creates a lot of processing power to add anything to the blockchain, many marketplaces charge a “gas fee” to cover the electricity required to process complex mathematical problems. Once this is done and the asset is added to the blockchain, it has been minted. Since not everyone can do this, this is where Mintbase comes in. It allows anyone to create their digital assets & NFTs to be verified on multiple blockchains.
0xcert: Validate Ownership of Digital Assets
0xcert allows users to build decentralized apps using fungible and non-fungible tokens quickly in a cost-efficient and secure way. 0xcert is built to provide the best developer experience around. With clean code, simple docs, and easy implementation, it provides an intuitive dashboard and ensures a high standard ERC-721 token is present. 0xcert also provides a fully decentralized API so no one can interfere with your data or projects.
NFTX: Enables Community-owned NFT Index Funds
Focusing on ERC20 tokens, NFTX allows for NFTs funds to be collected and traded. NFTX will enable users to create funds based on their favorite collectibles, including Cryptopunks & Cyberkitties. Designed for users looking to get into the NFT marketplace but unsure where to begin, NFTX allows consumers to start trading NFT funds without having to shell out too much in finance.
Nifty Gateway: Limited Edition, Highly Exclusive Nifties
Nifty Gateway is the Supreme of NFTs. The company works with top artists & brands to create limited edition, high quality “Nifties” dropping at a specific time and available for a limited amount of time. If it worked for Kanye in the merchandise space, why can’t it work for NFTs? The company aims to drop a new edition about every three weeks with a mission to get 1 billion people buying and selling nifties. Recently acquired by the Winklevoss twins of Facebook fame, the platform has some big backers who know how to successfully scale tech companies, especially those in the crypto industry. Watch this space!
Still not convinced about the longevity of the NFT marketplace? Why not check out some of the most expensive NFT transactions within its relatively short history here. When else in the course of human history could you find a new market that is less than a decade old with items that are selling for millions of dollars? It won’t be long until the first NFT is sold for $100 million; at that point, I’m sure most of us will be looking under our mattresses for the savings we stuffed under there years ago and investing in a digital floating head.
It’s not long until we will start seeing more and more companies jumping on the NFT trend. We’ve already seen the NBA, often a litmus test for popular movements, take advantage of this space; how long until we see Maradonna’s Hand of God or a Tom Brady Superbowl touchdown being sold as an NFT? We’re already seeing music artists being selling music clips and UFC stars create trading cards. The sky is the limit for NFTs and blockchain technology. It looks as those digital media collectibles are here to stay.
Where You Can Begin
Before we begin, it’s important to note that this article is not intended to give financial advice and should in no way be perceived as investment advice. So, apart from the possibility to finance your children’s college education with some savvy NFT trades, with the staying power of NFTs, it’s vital to understand the best ways to get started before it’s too late. Start by doing your research. Don’t just go out and buy a Cryptopunk because you liked the look of it. Diversify your risk and understand what you’re getting into. Start by learning about blockchain technology and its uses. As with any investment, knowledge is power.
In this article, we’ve covered what a Non-fungible token represents and where to find NFT markets. Not only that but by understanding precisely what the ethereum blockchain is and how it works, you can now use any ethereum you have to begin trading NFTs with the cryptocurrency. While buying an NFT is no doubt a unique way to invest your hard-earned cash, the market shows that it’s here to stay, with the price of some artist creations turning out to be extremely rewarding. The digital ownership game is afoot. Will you jump on the bandwagon or consider it just another fad that’s likely to fade out sooner rather than later, let us know in the comments.