By: Shibasradha Nahak
“The virtual world will open thousands of new opportunities for this new generation”
INTRODUCTION
Have you ever fantasized about owning a plot of land near the Pandavas' castle in Hastinapur? You might be able to do that shortly with the non-fungible tokens (NFTs) and, they have the potential to create comic books and characters that most of us have grown up reading not just larger-than-life, but also make us a part of that universe.
NFTs (Non-fungible tokens,) are pieces of digital art that live on the blockchain network, and they are typically Ethereum based blockchain-based tokens creating a plan of action for digital assets starting from art and music to tacos and toilet paper, and these are selling like 17th-century exotic Dutch tulips— for millions of dollars. This asset class can bring a phenomenal change in the field of the digital asset because these are typically used to buy and sell digital artwork and this can take in the form of GIFs, tweets, virtual trading cards, an essay, an in-game item, images of physical objects, video game skins, virtual real estate, etc.
HOW DO NFTS FUNCTION?
The transaction of NFTs can only be done through blockchains. And most of these asset classes are concentrated on the Ethereum blockchain because it ensures that the trade is done with authentic people and diminishes the hacking probe with a safe ecosystem.
NFTs and their applications
With the emerging popularity of NFTs, the uses of NFTs are also escalating compared with conventional applications. Some of the applications of NFTs include:
Art: During its initial phase it was used to tokenize digital art for authentication and transferring the ownership to the purchaser. But, now it has become common use for the user throughout the entire history of the art, including the previous prices of NFTs and successive owners.
Fashion: It is used in the fashion industry to cross-check the originality of luxury items digitally to avoid fraudulent activities.
Licenses and Certifications: To tokenize the NFTs, licenses, and certifications are cross verified to safeguard ownership.
Gaming and Virtual World: NFTs are providing multi-dimensional ways to do transactions in the virtual world. Here, you can structure your land virtually and eventually sell those to gain margins. And you can also include in-game features which can bring glare for users.
Collectibles: The most valuable NFTs are accumulated and speculated that they will increase manifold in the upcoming future. And expected that this bulk investment will leverage their future outcomings.
TRANSACTIONS INVOLVING THE LARGEST NFTS
The First Tweet: Recently the co-founder of Twitter Jack Dorsey auctioned the first tweet on the Twitter platform and sold that for a whopping worth of $2.9 million.
Eminem’s official bought the Ape artwork which depicts an ape with white fur, with low grey hat, and a golden jacket with matching chains. The NFT was sold for 123.45 Ethereum, which translates to around $450,000.
Brands like Charmin and Taco Bell have auctioned off themed NFT art to raise funds for the charity which is equal to $3,723.83 at the time of writing.
Lebron James auctioned the NFT basketball card of “Lebron James dunking” and it attracted for $200,000 price tag.
The veteran actor Amitabh Bachchan marched with a bandwagon of NFT and collected a total of Rs.7.18Cr. and among those NFTs many vintage poems, and autographs were included
One of India’s vintage fashion designers Manish Malhotra sold NFTs of digital sketches which were worth around $4000 apiece.
Most NFTs are similar to artworks and paintings, but every person can have a copy of them, does that mean that they are the owners?
No, each NFT is given a set of standards that help to leverage its value. These criteria are known as token standards. The following are some of the most widely recognized NFT Vital token standards:
ERC-20: This token was created specifically for the Ethereum blockchain, and it represents a set of standards that must be fulfilled in order for Ethereum to work with crypto wallets.
ERC-721: It is one of the few single unique assets that hold information via smart contracts and accommodate data and information about the assets' ownership and identity. In terms of security, transparency, and immutability, it is seen to be superior.
ERC-1155: Although ERC-721 was utilized to establish a digital asset, ERC-1155 includes the necessary laws and support for both fungible and non-fungible tokens. It aids the ERC-721 process in making things go smoothly by allowing many types of NFTs to be created with a single contract.
REASONS TO CHOOSE NFT OVER OTHER ASSET CLASS INVESTMENTS
Value Growth: NFTs, like other asset investments that provide value-based returns, ascribe value to your investment. The primary reason for this is that NFTs value appreciation because they are utilized in blockchain games, which are becoming more popular with the advent of VR and AR games. So, if you acquire these tokens and want to store them for a long time.
Possession of a One-of-a-Kind Item: Digital collectibles, like NFTs, are non-fungible, which means they cannot be replaced. It's a nice feeling to know you possess a one-of-a-kind work, whether it's a painting, digital image, audio clip, or any other digital asset.
Data Record: In the digital age, maintaining the asset's authenticity and credibility is difficult. So, with blockchain's backend assistance, NFTs were able to flip things around in their favor. This is why NFTs are so effective.
WILL THIS TRANSFORMATION LAST?
NFTs are highly speculative plays from an investing standpoint. Only collectors can determine the true worth of any piece of art or photograph. As a result, as the spotlight switches from blockchain to NFTs, it will be less enticing for the general public to participate. Although there is a great likelihood that the value of these digital tokens will be maintained, it will also open up a broader vista for investors to push these tokens to the top of the table.
CONCLUSION:
NFTs have shown to be a unique and lucrative investment instrument, and they provide you the opportunity to own anything on the blockchain that isn't a cryptocurrency. Because the next decade will be digital in terms of authenticity, credibility, control, and asset ownership, there's a good likelihood that NFTs will become a big force in the market. So, before diving into these fungible tokens, make sure you're well-versed in this amazing technology.
Embrace the technology! Go Digital!
Well Written💯
Well Written!