You might have come across jpeg files being sold for over $3 Million, $4 Million and the most expensive going to $70 Million as well. It’s quite enthralling to see these photos or rather art being sold at such high valuations. It would be fair enough to ask-“Why are these pieces of jpegs or NFTs so expensive? Has NFTs just become a new fad for the rich people to become richer? Are these NFTs genuinely so valuable? All these questions will be answered after reading this blogs.
Last year, even Amitabh Bachchan launched his NFT Album Collection which consisted of exclusive access to audiobooks of legendary poet Harivansh Rai Bachchan's poetry with Amitabh Bachchan's voiceover, Sholay's official poster signed by Amitabh Bachchan and other Amitabh NFT collectibles.
NON FUNGIBLE TOKENS- NFTs
NFTs or Non-Fungible Tokens is the new-age digital asset class emerging within the field of blockchain or cryptography. NFTs can be referred to as digital assets, based on decentralized and growing blockchain algorithm. They are essentially considered to be digital art forms. But, this leads us to a question-“How are these art forms different as compared to physical art?
First of all, obviously, NFTs are intangible art-forms or rather digital assets. Secondly and more importantly, as the name suggests, non-fungible meaning non replaceable, implying that they can’t be traded or exchanged in place of each other. This differs from fungible tokens like cryptocurrencies, which are homogenous in nature, hence, commercial transactions can take place easily.
Cryptocurrencies are fungible, meaning, they can be exchanged in place of each other. For example, one Ether will always be equal to another Ether in terms of monetary value. The standout aspect of NFTs is its characteristic of irreplaceability, quite different than cryptocurrency. Thus One NFT can’t be traded with other NFT.
The use-case of NFTs is much greater than you think it to be. It’s not just a form of art, but it has several other potential commercial application to it as well, explained later in this article. Although currently, much of the current market for NFTs is majorly centered around collectibles, digital artwork, rare collectibles and such similar stuff.
NFTs operate on Ethereum Blockchain, namely the token standard ERC-721. In gist, one key feature of the Ethereum Blockchain is the concept of smart contracts. They are the programs(refer to contracts) which have certain predefined conditions, on the basis of which the programs executes itself. NFTs are powered by smart contracts (ERC-721) which handle the transferability and verify the ownership. Although, there are NFTs project like Degenerate Ape Group(NFT below), which operates on Solana.
There exists and Indian Metaverse Project, which is currently in development known as ZionVerse. This metaverse project is inspired by The Great Indian Mythology of Ramayana, Mahabharata, and Upanishads. This project was started by Anshul Rastugi. Along with this, they also released 5555 Exclusive Laxmi NFTs, which is sold out right now.
Relevance of NFTs
NFTs are potentially revolutionizing the art industry- from arts, paintings, visuals, and even music. The most evident benefit of NFTs is market efficiency. It helps in streamlining processes and removes intermediaries. For example, whenever an artist published music, the streaming platforms and labels take most proportion of the revenue created out of the artist’s music. But with NFTs in the form of music and art, the artist can earn the entire revenue themselves. Thus, making the creator economy as whole more efficient.
Non-fungible tokens are also excellent for identity management. Consider the case of physical passports or even event tickets that need to be produced at every entry and exit point. By converting them into NFTs, each with its own unique identifying characteristics, it is possible to leverage this procedure and make it more efficient. Expanding this use case, NFTs can be used for identity management within the digital realm as well.
Another use case of NFTs is in Metaverse. The main connection between the metaverse and NFTs is related to digital assets and how they are given value. The metaverse will allow people to showcase digital forms of art and property, and NFTs will allow them to put a price on that content with proof of ownership. NFTs could also become some sort of currency in metaverse. With NFTs, people can show proof of ownership of different things in the metaverse. Decentraland, a metaverse project, is selling virtual estate for millions in their metaverse of Decentraland, and this takes place through NFTs.
Brands can use NFTs as a way to incentivize their customers for loyalties. Further, many NFT clubs such as Bored Ape Yacht Club (BAYC) provide real life utilities to the members of this NFTs. They conduct meetups, parties and other membership utilities, where you need NFTs as an entry ticket. Some NFTS projects are just a cool clubs for super-rich people to purchase collectibles/rare items etc.
Good NFT Projects
Cryptopunks
They are the OGs in the NFTs space. Initially, they were given out for free, but now on average they are sold for 1500 ETH (3 Million Dollars). They work on Ethereum blockchain and as such don’t have any utility value. But, they are collectibles for rich folks.
Bored Ape Yacht Club (BAYC)
Degenerate Ape Academy
Mutant Ape Yacht Club (MAYC)
Decentraland
Axie Infinity
NBA Topshot
BEST MARKETPLACES
Open Sea (Recommended)
Larva Labs ( Only Cryptopunks)
Rarible (Recommended)
This brings us to the end of this blog on NFTs. If you find this valuable, please do share with your folks. More content on Blockchain coming soon!
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