Photo: The Guardian
The world has finally acknowledged the rise and validity of non-fungible tokens and their many quirks. Still, not many who are fascinate by this portion of blockchain technology understand how it functions. NFTs are technically virtual objects establish in the blockchain, a digital ledger of operations distributed across an entire network of computer systems, holding unique and non-interchangeable features.
NFTs can fundamentally be anything, but a more significant part of it can be in the form of art, music, video game items, and videos. The most distinguished among the list are artworks, where these types of digital tokens are selling for millions of dollars at major auction houses, allowing artists to capitalize more on their work compared to when they were merely posting it for free or selling it for cheap.
NFTs have been around for some time now, but they took off in 2017 when a decentralize application called CryptoKitties, a place where users can buy, trade, and collect virtual cats, was launch in the metaspace. It also made headlines when digital artist Mike Winkelmann, also known as Beeple, sold one of his pieces—“Everyday: The First 5000 Days”—in JPG format for roughly $69 million. Since then, plenty of companies have experimented on various NFT materials to test their capabilities. As a result, in 2020, the NFT market ballooned by close to 300% and the number of NFT wallets on which NFT transactions have happened nearly doubled.
Aside from artworks, there has been a steady influx of companies that incorporate. This piece of blockchain technology is into video games. Ever since the remarkable success of CryptoKitties, gaming has become a potential vessel for some NFTs. Though the concept is not very new, given how some brands already sell various in-game cosmetic items. Like skins, companies are still inclined to take a jab. In the NFT sector because of its growth potential. Because they perfectly complement each other, gaming and NFT have become a particular kind of pairing. That is incline to make a splash.
Non-fungible tokens are not just limit to a single kind of group; they are available to anybody who wishes to have them, as long as they can afford it. Since they are essentially a digital version of a product, an NFT can only have one owner. Ownership of a particular product is managed through unique metadata that no other token can replicate. No matter the circumstances, making any NFT product distinct.
Although they exist in the same blockchain space, cryptocurrencies and NFTs completely contrast. A cryptocurrency like Bitcoin, perhaps, is fungible—interchangeable with anything of the same value—like when you exchange one Bitcoin for another. It still holds the same rate. Non-fungible tokens, on the other hand, are entirely non-interchangeable, meaning an asset will never be equal to another, making them even more valuable.
The NFT market has had quite a phenomenal growth spurt over the years. And it is not showing any signs of slowing down. News of more NFT projects joining the blockchain space in 2022 is making quite the buzz. Creating an opportunity for the market to expand and probably make their way into yet another craze.