You probably have heard many people talking about NFTs all over the Internet and were wondering what it actually is. This type of digitized assets falls under the category of cryptocurrency tokens, and the special about them is that they are absolutely unique and, therefore, hardly interchangeable.
What are NFTs and their history?
To give a proper definition to NFTs, these are digitized certificates that indicate the authenticity of the ownership of an asset. It also allows them to be purchased and changed like many other cryptocurrencies such as Bitcoin, which is also supported by blockchain technology. Art is a good example to understand non-fungible tokens. What happens is that one can own two exactly similar pieces of art however, both are unique. A famous crypto artist, Josie, had released two NFTs that look exactly the same to the eye, however, in terms of the blockchain, they both were completely different from each other.
Non-fungible tokens go way back in time, and some people might be surprised by this as it feels like a new concept. In 2012-2013, developers made their first attempt to come up with NFTs, this is when the Colored Coin era was launched. This was the initiation of NFTs and, since then, this concept has grown massively. In the past two years, NFTs has seen major developments and the idea has experienced more following from the business and trading community. It is still a new concept and will keep growing bigger and bigger in the coming times. Once people and companies realize how big of an impact NFTs can make, more people will hop on the bandwagon which will prove beneficial for its development. NFTs have come a long way, from Counterparty to Cryptokitties, each project has added a big impact on the crypto world. Some more projects including Colored coins, Peperium, Cryptopunks, and others have also paved the way for the NFTs.
What’s so special about NFTs, what differs them from other crypto assets
Other than denting the world of digital currency with its non-fungible mechanism, NFTs give a way to authenticate digitized artwork. The best thing about this is that the control over the crypto art is given back to the artist which further prevents any sort of theft issues. Additionally, it allows an artist to have a recurring revenue stream.
These non-fungible tokens have properties that differentiate them from all the other crypto assets. Their uniqueness is what sets them apart. NFTs, give their users a method in which they can demonstrate more tangibly and can be presented in a digitized form. NFTs are making digital transactions more safer and reliable. They are playing a significant role in promoting investments in the crypto market. Going hand in hand with blockchain technology, NFTs have the potential to act as a significant authentication tool.
Today’s hype around NFTs
There is no doubt that over the past couple of years, non-fungible tokens have experienced a tremendous hype in their popularity. Bitcoin has had a big impact in making digital scarcity more known among the people. If this feature is joined with the ability to add uniqueness to each token, it gives birth to a wide range of cases of digitized collectibles. This first started to blow off in 2017 when CryptoKitties was launched. After the launch of CryptoKitties in 2017, NFTs became very widely known among the people in the crypto market. Many things became possible such as selling, trading, collecting.
Artists are also trusting the working mechanism of NFT. Recently, musician and partner of Elon Musk, Grimes sold her digital artwork of approximately $6 million in a mere couple of days. The short videos and songs were sold for thousands of dollars through a bidding system. NFTs are supporting artists by giving them a profitable investment opportunity.
What does it mean to the whole crypto market?
Non-fungible tokens caught the attention of the crypto market with the launch of CryptoKitties as they pressed the Ethereum blockchain. This led to many problems such as slower transaction processing and extremely high fees. Even though these are not necessarily considered to be a new concept in the crypto universe, NFTs have been discussed in the crypto market a lot. This took place after news broke out regarding the popularity of NFTs that it is not in its growing stage anymore, it has evolved into a full-fledged industry that now has a value of hundreds of dollars. With the support from the likes of Elon Musk, NFTs are now making their mark in the global crypto market.
Through its history, it is easy to gather that in a couple of years, most of the world will be pervaded by NFTs despite not being involved in being players or collectors with blockchain. These include shares, derivatives, artwork, authentication of ownership, driver’s license, insurances. Anything which can have its uniqueness. With the growing popularity of cryptocurrency and digital assets, NFTs are set to play a more major role in the global market. Its capabilities to solve the issues of digital frauds and copyrights have set the tone for major upgrades in the field of crypto. As of 2021, NFTs are getting more relevance and recognition in the entertainment industry than ever before, and hence it is only meant to upscale from here on in the coming years.