In the past few months, non-fungible tokens (NFTs) have been a hot topic of discussion in the blockchain community. While some may think they are a passing fad, NFTs are going to revolutionize the way we interact with digital goods on blockchains—specifically in gaming and collectibles.
NFTs also open up a whole new world of possibilities for how we use blockchain technology.
CryptoKitties. CryptoPunks. Most people in today’s blockchain world have heard of these NFTs, but not everyone knows what they really are or why we should care about them.
If you want to learn more about this exciting new tech, read on!
What is a Non-Fungible Token (NFT)?
A non-fungible token (NFT) is a type of digital asset that is unique and cannot be duplicated. This means it cannot be copied or cloned, making it perfect to tokenize just about anything from houses to game items and even works of art!
Think of it like a cat-collecting game in which each cat has different attributes, or traits, that differentiate it from other cats on the platform. No two cats—or non-fungible tokens—are alike. However, similar to fungible tokens like Bitcoin, all NFTs are divisible and interchangeable through smart contracts.
CryptoKitties is an early example of a NFT. The ERC-721 token standard is what makes CryptoKitties unique. The Ethereum blockchain lets you create unique, digital assets to buy, sell, trade or collect. In other words, it’s like owning a single collectible card in Pokémon but not being able to use it anywhere else except within its ecosystem. This gives NFT’s true rarity; as only one exists in any virtual world.
Why Are Some NFTs Worth Millions Of Dollars?
With NFTs, unique items can now be digitalized on the blockchain so they cannot be counterfeited or replicated. Digital collectibles not only have greater accessibility but also provide great opportunities for investors who see value in such limited-edition items that will rise in price as popularity increases.
The rarest NFTs can be worth millions. These digital assets are unique in that they are one-of-a-kind and cannot be duplicated. Take CryptoKitties for example. These NFTs are one of the most highly sought-after crypto collectibles on the market. Their popularity is a result of how unique each cat is. The value of each CryptoKitty ranges from $0.6k to $100k, with some even reaching 6 figures!
An NFT of digital artist Beeple’s work brought in $69 million at an auction in March 2021. The artwork is named “Everydays: the First 5000 Days.” It was a compilation of the first 5000 digital arts of Beeple. In reality, Beeple has been making digital arts since May 2007. Hence the compilation has a lot of varying styles, contents, and mediums. And that is why this is one of the most expensive NFT ever sold so far, and surely one of the valuable non-fungible tokens in 2021.
There are many reasons why some NFTs can be worth millions of dollars. For example, they may have a large community following, or the creator behind them is highly respected or well connected in the industry. However, there are other considerations that make certain NFTs more desirable than others, such as scarcity and decentralization.
NFTs have been around for years, but have recently are gaining popularity with the advent of blockchain technology. As more people learn about NFTs and their use cases, more collectors are jumping on board. This has led to high-profile auctions where certain collectibles have sold for thousands if not, millions of dollars.
The Future Of NFTs In Real Life Applications
Whether or not you see a future for NFTs in real-life applications, it’s pretty clear that there is currently a large demand for them. These interests have led to an explosion of creative initiatives looking to utilize NFTs in unique ways.
In digital worlds like CryptoKitties, users can breed digital kittens, which have certain traits coded into their DNA. One day, we could use such technology in real life.
For example, imagine buying a car that you couldn’t drive until you unlocked it using its unique digital ID. How about personalized medical treatments tailored to each patient’s genetics?
One day, these things might be possible thanks to blockchain technology and non-fungible tokens.
Gaming companies such as CryptoKitties have already started to experiment with non-fungible tokens and have seen success in implementing these ERC-721 tokens into their games. The gaming world has been a large proponent for many new technological advancements over recent years, and it’s no surprise that NFTs are starting to see use within that industry.
Another area that could really benefit from NFTs is electronic medical records (EMRs). Right now, most EMR systems are siloed—and if a patient wants to switch providers, their information needs to be transferred manually. Putting patients’ records on the blockchain could greatly simplify that process. Individuals could also share relevant health information directly with any provider—rather than having to repeat their entire medical history from scratch every time they see a new doctor.
The Future Is Bright For NFTs
In theory, all industries would benefit from implementing NFTs, but implementation depends on if those industries are open to blockchain technology and cryptocurrencies at all.
The market for NFTs is still in its infancy. There are currently no exchanges that offer the right mix of usability, security and liquidity to make them suitable for mainstream adoption. One of the primary venues for trading NFTs today is OpenSea.
We are still at an early stage where many people have yet to fully understand how NFTs can be used beyond gaming or speculation.
We hope that, in the coming years, there will be more use cases from companies innovating in fields such as media & entertainment, social networking, data privacy and more!
The future is bright for NFTs. With more platforms creating ways to leverage them and more mainstream attention being given to blockchain, it’s only a matter of time before everyone knows what they are. And once that happens, we’ll finally have a way to democratize digital ownership.