$2.4 billion, that’s a lot of counting to do. We do not intend to numb you with numbers but that’s the NFTs total market cap at the time of writing. This technology had taken the digital art, games, films, and music market by storm. In case you wonder how? Well, have you tried selling the best painting you had drawn lately? How was the experience? I bet the exhibition platform might have demanded a hefty sum in the form of commission. That’s where NFTs make the difference.
What are NFTs?
NFTs or Non-fungible tokens are unique asset classes that are not interchangeable. For example, you can exchange a $5 bill with another. However, NFTs do not work that way. They are unique and represent a sole existence.
How Do They Work?
Users mint a token against a piece of collectible. It could be anything like a piece of art, music, or a movie. Whenever someone wants to take ownership of the asset, the NFT gets minted and transferred to that wallet address. In this way, that particular wallet address becomes its owner. He/she can intend to use the NFT in his/her way. For example, in the case of songs, the owner can wish to stream them based on payments. Whereas, in the case of paintings, the owner can break the painting into fragments and sell every piece as a separate item. All NFTs work as per specific standards. The Ethereum blockchain proposes ERC 721 and ERC 1155 to power up NFTs.
How did NFTs come into existence?
Colored coins were erstwhile predecessors of NFTs. Despite that, they failed to drive value to stay sustainable within the NFT ecosystem. As a result, Memes ended up as the first claimant of NFTs. In 2017, Peperium became an effective marketplace to sell Meme NFTs. However, Cryptopunks laid the base for the next big NFT revolution. The project spearheaded by John Watkinson and Matt Hall allowed creating unique characters. As per the project, there will only be 10,000 unique characters to trade. Thus making them rare and valuable in the process.
The success of Cryptopunks encouraged new projects and token standards to evolve. Cryptokitty event made NFTs mainstream and we witness crazy profits trading NFTs now.
Where Will NFT Go In the Future?
When you realize that a YouTube video named Charlie Bit a Finger Video selling for $760,999. At a certain point, you may say NFTs are a bubble. In reality, NFTs have the potential to further transform the digital realm. For example, Facebook rebranded to Meta. In 2021, lands in the Metaverse experienced exponential sales. With time, metaverse will go mainstream and be ready for adoption. At that point, NFTs will further broaden their scope to power up art, music, sports, and virtual assets. With the Web 3.0 model going mainstream, NFTs will turn pivotal as the craze for blockchain gamification becomes bigger.NFTs: History and the Future Explained