What is an NFT - Non-Fungible Token
If you haven’t been living under a rock for the last few years, then you’ve certainly heard of the word, “NFT”. Most of the newcomers in the NFT space might consider an NFT to be only a “jpeg”, which is just a picture. However, there are certainly a lot more aspects to an NFT you might not know about. Luckily, we are going to break down what an NFT is, how they are used, and where the NFT space could potentially be heading.
An NFT is short for “Non-Fungible Token” which can be compared closely to other blockchain components such a cryptocurrency. Like cryptocurrency, NFTs can be traded, bought, sold, and even minted. The NFT is a digital asset that lives on the blockchain and has a unique identifier, meaning they are easily trackable and cannot be replicated. Where cryptocurrency and NFTs differ is the means of exchange.
Crypto can be used similar to how cash is used as a medium of transactions where each “token” or “coin” of crypto represents a set value. NFTs on the other hand can be quite unique and represent a vast amount of asset types. The most popular place to buy and sell NFTs right now is OpenSea which is quickly growing in private valuation.
What are NFT use cases?
NFTs are being used for a vast amount of applications and growing every day. Most commonly, NFTs represent artwork by creators. Not only can an NFT represent a piece of digital artwork, but it is common that ownership of an NFT represents ownership of a real-world item. This can be something like artwork, real-estate, or other tangible assets like memberships & property rights. Property can pertain to artwork ownership, music ownership, and other real world applications. The NFT on the blockchain helps facilitate the ownership and security of these assets and continues to grow in use cases.
Artists find NFTs extremely lucrative because it gives the artist the ability to retain a royalty on their artwork every time it is bought and sold on the secondary market. New organizations like the Minter’s Lab main goal is to streamline existing and aspiring artists into the NFT world with ease and education.
Most Popular NFTs
Some of the most popular NFTs today were started in 2017. Specifically, Crypto Punks is recognized as one of the most original works of NFTs put together as a 10,000 PFP collection. If you are unfamiliar with the term “PFP”, it typically means picture proof/profile picture, commonly used as social media avatars. The Crypto Punks collection has gone on to become one of the most coveted collections in the NFT marketplace.
This specific CryptoPunk #8857 sold for near $6.63 Million in September 2021, (2,000 Ethereum).
Bored Ape Yacht Club, launched in 2021, have quickly became one of the top tier projects in the space. This happened after gaining popularity with a strong community and many top influencers like professional athletes joining in.
Of course we can’t forget about the famous Snoop Dogg piling into NFTs the last few years. Here is his pimp coat wearing Bored Ape!
Where are NFTs going?
NFTs are growing in use cases beyond just the artwork. Some of the more popular use cases for NFTs are now memberships to communities, or access to high utility functionality that benefits the holder of that NFT. This could be your own personal metaverse like the Sandbox or Decentraland property. Or even access to ownership in a DAO (decentralized autonomous organization) like Gray Boys NFT Collection. This type of collection gives you the ability to own other assets by proxy, that you might not be able to afford on your own.
Community has always been one of the core variables of an NFT collection. Strong communities like The Wall Street Bulls NFT Collection ensure the longevity of demand and value over time. NFTs as a membership or ticket is becoming the norm for many mainstream companies as they pile into the industry to keep up with the current trends. Companies like Nike, Microsoft, Taco Bell, & others are diving head first into the fast growing arena.
We hope you enjoyed this quick summary about NFT’s and what they are. The more you learn, the more you earn! If you have any questions or comments, use the contact form below to get in touch with us.