Thoughts on NFTs
If you are using the internet daily, you may have discovered the word NFT especially in the Digital Asset side of the internet. NFTs are getting popular in 2021; now, this year Digital Assets will grow in popularity considerably like various Crypto Currencies. Before diving a little deeper, let’s understand the NFTs. NFTs (non-fungible tokens) — or scarce digital content drawn as tokens — are driving a novel wave of crypto adoption. Due to Ethereum blockchain’s compatibility, artists, gaming companies & content creators are utilizing token standards that assign provenance to unambiguously different assets. NFTs 1st created headlines in 2017 once Dapper Labs’ game Crypto Kitties accounted for ninety-fifth of Ethereum network usage at its peak. Somebody paying $170,000 for a digital cat looked like an anomaly. What’s happening these days blows that headline out of the water. Platforms like Super Rare, Nifty, Gateway Foundation & Zora quickly rise because the leading players add to a digital world to validate their creatives. Okay, so you know how it is currently booming; these are digital assets representing a wide range of specific tangible & virtual things, from collectible sports cards to virtual estate & even digital sneakers.
One of the most advantages of owning a digital collectible versus a physical collectible like a Pokémon card or rare minted coin is that every NFT contains identifying data that produces it, each distinct from the other NFT & very easily verifiable. It makes the creation and circulation of fake collectibles pointless due to every item being traced back to the first issuer. Unlike regular cryptocurrencies, NFTs cannot be traded directly with each other because any 2 NFTs are not always identical, even if they exist on a single platform, game, or within the same assortment. Consider them as festival tickets. Every ticket has some specific data together with the purchaser’s name, the date of the event & also the venue. This information makes it impossible to trade festival tickets with each other.
The majority of NFT tokens were created using one of 2 Ethereum token standards (ERC-721 and ERC-1155) – blueprints created by Ethereum that enable software developers to simply deploy NFTs & guarantee they’re compatible with the broader ecosystem, together with exchanges & wallet services like MetaMask & MyEtherWallet. Eos, Neo, and Tron have conjointly released their own NFT token standards to encourage developers to create and host NFTs on their blockchain networks.
Let’s have a quick view of the Standards of NFTs.
According to Wikipedia, Specific token standards have been created to support a blockchain in gaming. These include the Ethereum ERC-721 standard of Crypto Kitties and the more recent ERC-1155 standard.
ERC-721 Standard:
ERC721 was the first standard for representing non-fungible digital assets. ERC721 is an inheritable Solidity smart contract standard, meaning developers can easily create new ERC721-compliant contracts by importing them from the Open Zeppelin library.
ERC-1155 Standard
ERC1155 brings the idea of semi-fungibility to the NFT world and it provides a superset of ERC721 functionality, meaning that an ERC721 asset could be built using ERC1155.
Here are some other key features of NFTs:
Non-interoperable:
A CryptoPunk can’t be used as a character in the CryptoKitties game or contrariwise. It’s the same for collectibles like trading cards, too; a Blockchain Heroes card can’t be played in God’s unchained trading-card game.
Indivisible:
NFTs can’t be divided into minor quantities like bitcoin satoshis. They exist exclusively as an entire item.
Indestructible:
As all NFT information is held on the blockchain via smart contracts, any token can’t be destroyed, removed, or replicated. Possession of those tokens is immutable too, which means gamers & collectors possess their NFTs, not the companies that make them. It contrasts with buying things like music from the iTunes store where users do not own what they’re buying; simply purchase the license to listen to the music.
Verifiable:
Another good thing about storing historical possession information on the blockchain is that things like digital design are often traced back to the original creator, which permits items to be genuine without the necessity for third-party verification.
Is it just a bubble?
These days, what’s happening within the NFT ecosystem is nothing short of a paradigm shift for a maturing sector of cryptocurrencies. As keen collectors mount their digital art using companies like Infinite Objects, there’s no denying the massive majority of consumers are here to invest. This amplified demand signals interest but highly appreciates the 2017 ICO boom that caused the market to crash a few years ago.
However, out of that multi-year bear market came a powerful wave of foundational corporations & products like Uniswap & Compound that are here to remain. We’re sure the same will happen with NFTs. Until then, keep in mind that digital content does have worth, and crypto collectors are flocking to get their namesake on the most important collections of tomorrow.
A bi-weekly newsletter with Hexorial Studio's original & curated stories on design, technology & startups also gets cool resources, freebies. Sign up for our newsletter
Join a community of other creators, designers, developers, makers, and teams to share, learn, and talk about design, product & business! Telegram community
To stay up to date with the latest updates and news, Follow us on Twitter, Instagram ❤️
