What are NFTs? Non Fungible Tokens Explained
Will NFTs Take The Crypto Finance World By Storm And Become A Millionaire Maker For Investors?
Non-Fungible Tokens or NFTs have gained traction in the decentralized finance (DeFi) world with more than 716,000 results on Google.
As the hottest topic in the world of DeFi especially in 2021, particularly, the month of March, several creators of NFT art have benefited massively, creating several millionaires in the process as NFT prices soared to the roof in physical and digital auctions across the world.
Ethereum (ETH) has the first mover advantage with regards to the use of smart contracts and others such as Tron (TRX) and Cardano (ADA) promised to pose a strong challenge to their status as the king of DeFi based on just decentralized applications or protocols?
The inception of NFTs has added another headache to the development patterns of the founders of primarily the two competitors (TRX and ADA), as they look forward to building systems which would be able to hold up non fungible tokens art and see them gain a fair share of the non fungible tokens market.
The performance of such platforms will undoubtedly contribute to the overall market valuation of the tradable coins of these blockchain technologies which will bolster their quest to become the primary colonizers of the crypto finance space.
With Ethereum (ETH) leading the line as a plug and play blockchain which gets in on the act right from the start, make mistakes and make the necessary changes to bolster the performance of its blockchain, will the king of Decentralized Finance (DeFi) maintain a lead on NFTs as it has on decentralized applications and protocols (DAPPS)?
With three of the best-performing assets on the non fungible tokens list running on Ethereum’s Blockchain, the smart contracts network boasts of having the top non fungible tokens by market capitalization.
Tezos (XTZ) and FLOW feature strongly and are currently competing with Ethereum (ETH) for the best non-fungible tokens with a view of taking over the NFT market.
Cardano (ADA) and Tron (TRX) tag themselves as Ethereum Killers; it seems the two crypto projects would have to find an extensive developer answer to NFTs before they can dethrone Vitalik Buterin’s technological innovation as the number one smart contract blockchain of choice.
Just as Bitcoin (BTC) became the digital gold and answer to fiat currency with its decentralized and blockchain technology, Ripple (XRP) has become an answer to on-demand liquidity for cross-border payments which are settled in minutes to hours instead of business days and Ethereum (ETH) has become the answer to lending and borrowing through its decentralized applications, non-fungible tokens (NFTs) are being tagged as the digital answer to collectibles.
Can you believe going to an auction and witnessing someone fork out $69 million for a piece of art which did not have a physical representation of being a painting, sculpture or even a print?
That is what the craze about NFTs is all about and some financial analysts and experts have weighed in with regards to the patronage of the hottest asset in the crypto finance space.
There are several experts in the collectibles and finance industry who have opined that NFTs are a bubble which would burst in the not-too-distant future.
On the other hand, the numbers behind the NFT marketplace says otherwise as it could become the new Bitcoin (BTC) in the decentralized finance stratosphere and surpass every price forecast by gurus of the financial market.
At the time of writing this report, NFT had a combined market capitalization of $10,855,780,716 ($10.86 billion) and a trade volume of $1,865,050,997 ($1.86 billion) as per data retrieved from behavior, analysis and monitoring platform (SANBASE).
This article takes an in-depth look into the new product in the DeFi market which will see NFT explained.
Most importantly, for traders and investors, it would answer the questions what are NFTs used for, what are NFTs in cryptocurrency, what blockchains are NFTs built on, how do NFTs work, are NFTs harmful to the environment, how are NFTs created, what are NFT art and music, how and where to buy non fungible tokens and the overall outlook as to whether NFT is going to boost the overall price valuation of the blockchains it runs on?
What Are NFTs?
Non-Fungible Tokens (NFTs) are cryptographic assets that run on a blockchain and possess unique metadata and codes of identification which distinguishes them from one another.
In other words, NFTs can also be referred to as digital assets which serve as a representation of a wide range of tangible and intangible items which are unique, from digital sneakers, virtual real estate and collectible sports cards.
There are several features or characteristics of non fungible tokens and includes verifiability, indivisibility, non-interoperability and indestructibility.
On INDIVISIBILITY, it is impossible to divide NFTs into smaller denominations. Once you purchase let’s say an NFT crypto art from an NFT market; it has its own unique properties which means it cannot be interchanged with any other thing. With that said, as Ollie Leech of Yahoo Finance puts it “They exist exclusively as a whole item”. To better understand this, let’s take a look at fiat currencies and cryptocurrencies which are divisible.
With fiat currency (EUR, GBP or USD), you can swap $20, £20 or €20 note for two ($10, £10 €10) and it would result in the same value. Another example is on cryptocurrencies. You can purchase 50% of Bitcoin (BTC) which would be represented by 0.5 BTC and purchase another 50% at a later time. The two can be exchanged for 1BTC since (0.5 + 0.5) would result in 1.
Being indivisible, NFT art is a whole item which cannot be divided or interchanged with another non fungible token such as a collectible sports card.
On INDESTRUCTIBILITY, smart contracts play a great role in the creation of NFTs. As a result, the data of non fungible tokens are stored on a blockchain which means that each token cannot be replicated, destroyed or removed.
Additionally, there is immutability in indestructibility as the collectors and gamers have extensive ownership of the tokens, which means the creators of the tokens do not have possession of the tokens. A great example can be attributed to purchasing a song from a music streaming website; you only purchased the right (license) to gain access to the music through listening. NFT tokens means you would own the music and decide to use it for whatever you so choose.
On VERIFIABILITY, digital artwork (NFTs) can be traced back to the original creator since it was stored as data on the blockchain with details of historical ownership. In terms of authentication, this makes it easy for pieces to be authenticated without verification from third-parties.
A great example can be attributed to a collector making a purchase of the digital version of the Balloon Dog. There is no need to contact Jeff Koon (the original creator) to certify the current ownership of the piece since details of the ownership are stored on the blockchain which makes it easy to authenticate and settle any disputes which may arise.
On NON-INTEROPERABILITY, one token cannot be used or accessed by another. A great example can be attributed to Crypto Punks (24×24) pixel art images which are generated algorithmically and created by Larva Labs (independent organization) cannot be used on the Crypto Kitties game created by Dapper Labs. In the same way, features and creations by Dapper Labs cannot be used on a platform by Larva Labs.
Although Polkadot (DOT) is trying to create a bridge to host all blockchains which has been lauded by crypto enthusiasts, NFTs are extremely different and need to maintain their uniqueness through its features to be able to give it a fair market value which would be worth possessing.
Why Are NFTs Important?
Non-fungible tokens (NFT) in the space of four years have become extremely popular with users of crypto finance because of how it has played an instrumental role in revolutionizing the collectibles and gaming space. It is a complete evolution over the relative simple concept of cryptocurrencies.
The traditional finance system comprises a trading and loan system which is extremely sophisticated for different types of assets which ranges from lending contracts, artworks and real estate.
Since two (2) is better than one, having just physical assets is not enough. Just as documents are entitled to have a soft copy, so do physical assets like arts, real estate and gaming products deserve to have some form of digital representation.
Non-Fungible Tokens (NFTs), therefore play an invaluable role in the reinvention of this infrastructure.
It is a known fact that having digital copies using the current technological systems is not safe as several artists have complained about copyright issues with regards to the circulation of their creation via technological tools.
This is why NFTs storing data on smart contracts on a blockchain which has an added benefit of being tamper-resistant makes a potent force which needs to be embraced for change.
MARKET EFFICIENCY is one of the advantages of non-fungible tokens. Satoshi Nakamoto introduced the whole world to a financial system where each and every individual so long as you have access to some form of internet connection would be able to send and receive funds without any intermediaries (traditional banking institutions, clearing houses and insurance companies).
This meant that having a digital form of money lessened the impact these institutions have on our day to day financial transactions. In the same way, being able to convert a physical asset into a digital asset removes intermediaries such as auction houses, museums and art shops and places the creator in front of prospective interests (audience).
Smart contracts and blockchain technology in general has made it possible for collectors and gamers to become the immutable owners (unchanging over time). They have the chance to own in-game items as well as other unique assets and make additional income from them.
With a view on Decentraland and The Sandbox, players have the chance to create and activate the monetization feature in structures such as theme parks or casinos in virtual worlds.
Additionally, the players can sell items they accrue from their game play digitally and make more money. Some of these items include but are not limited to in-game currency, avatars and costumes through specialists websites solely interested in non fungible tokens.
NFTs are essential because they serve as a great instrument for the MANAGEMENT OF IDENTITY. The most important identity cards issued by every country are PASSPORTS. Sometimes, at airports, there are congestions and long queues which slow systems and delay time for passage because passports have to be inspected thoroughly at every exit and entry point.
By having a digital representation of such physical documents which has its own unique features thanks to the possibilities of smart contracts through blockchain technology, it becomes relatively easier to fasten the processes passengers go through at various destination points.
Moreover, NFTs can bring about DEMOCRATIZATION of INVESTMENT by fractionalizing physical assets. It is not impossible, but it’s extremely difficult to divide a piece of real estate among anonymous individuals. There may be several forms of friction between two parties who know each other let alone total strangers.
Digitalizing the physical asset among multiple owners makes it easy for individuals who want the estate who would have otherwise wanted it for themselves to share in the ownership of the asset.
Another example of the essence of NFTs in terms of democratizing investment can be attributed to art as an asset. A painting such as Mona Lisa has a great market value and the original is wanted by several collectors which come at a relatively expensive price.
Instead of allowing a single man to have it, several people can invest in the asset and profit from the future sale of the asset as a group and not as a sole entity.
The last factor is the CREATION OF NEW MARKETS and FORMS OF INVESTMENT by NFTs. Thanks to this blockchain technology, there have been several opportunities to make additional income due to the economic crisis brought forth by the coronavirus pandemic.
Several artists that would have otherwise seen their creations lie dormant are now cashing in and exposing their work to the world.
Musicians like Kings of Leon are using NFTs as a way to sell their albums and stay afloat due to social distancing being an essential protocol across all countries which has seen an automatic ban of music shows and concerts.
Overall, NFTs have created numerous opportunities and investment-wise can also be a unique store of value.
What Are NFTs Used For?
There are so many people who cannot understand the craze of this relatively newer product on the market which is raking in millions of dollars week in and week out. They have several questions such as what is its primary purpose, how does NFTs work and what are some of its use cases.
Non-Fungible Tokens (NFTs) primarily serve as an ideal vehicle to digitally represent physical assets such as artwork or real estate.
Because of their existence on blockchain (those with smart contracts features), non fungible tokens can be used for management of identity, it can connect artists directly with audiences and thereby remove all forms of intermediaries from any event which has a transactional outcome.
NFTs removal of intermediaries has also created new markets in the process which has seen numerous non fungible tokens for sale on several NFT marketplaces.
Notable Use Cases
There have been several use cases of NFTs but one of the pioneers in that space is Crypto Kitties.
Crypto Kitties created by Dapper Labs is an online game where breedable, collectible, and oh-so-adorable creatures are played. Crypto Kitties are digital representations of cats which have unique identifications on the blockchain of Ethereum.
There are several Kitties, but each one is unique and has different prices in Ether (the novel token which powers the Ethereum platform through its gas fees). With time, there is reproduction among the different Kitties and the new offspring come with their own features and price tags which is different to that of their parents.
It was reported that within a month or two, the creation of Dapper Labs, reached a huge fan base. In the process, almost $20 million worth of Ether (ETH) was spent on buying, nurturing and feeding the Kitties.
A reported $100,000 was spent by some individual enthusiasts of the crypto finance world on rare blockchain-certified images of cats.
Another use case that is of great importance is the NBA Top Shot (this is an online NFT marketplace to collect non-fungible tokenized NBA moments in the form of a digital card). A Lebron James highlight sold for $200,000 while a Zion Williamson edition reportedly cost a bit less.
Beeple sold an NFT called “Everydays - The First 5000 Days” for $69.3 million at Christie’s. This was the first of its kind since the inception of the auction house.
Until October 2020 when NFTs and the whole decentralized finance world saw a boom after the financial markets picked up the pieces following the financial crash of March and April 2020, the highest-priced asset Mike Winkelmann who is known as Beeple (digital artist) had ever sell was capped at $100.
This sale places him under the category of top three most valuable living artists.
The First 5000 Days is a collage of all the images which Beeple has posted online every day since the year 2007. This sale beat auction records for physical paintings by Georges Seurat, Francisco Goya and Joseph Mallord William Turner, who are renowned museum-valorized greats.
Inasmuch as this was the breaking news that should be lauded, this was not Beeple’s first auction sale. In October 2020, Mike Winkelmann sold his first series of non-fungible tokens, going for $66,666.66 per pair. It was followed by another series of works in the month of December 2020 which sold for $3.5 million.
In February 2021, another Beeple work titled Crossroad (a 10-second video NFT which shows animated pedestrians walking past a giant likeness of a naked Donald Trump) sold for $6.6 million in Ether (ETH) on Nifty Gateway. According to Reuters (online news portal which covers markets, business and technology, etc.), seller and collector Pablo Rodriguez Fraile purchased the piece in October 2020 for a paltry $67,000.
In March 2021, an anonymous group of tech and art enthusiasts who go by the pseudonym “Burnt Banksy” sold a blockchain-certified “Moron” which was a digital copy of a 2006 Banksy limited-edition print.
The group claimed it was the only print left after videos circulated on YouTube about the burning of the other art pieces. Using specialist website Open Sea, the digital copy of MORON sold for $382,000 which is a little over three times the value of the original prints. It was later reported that the buyer after making such a great purchase put it up for sale so that he could make gains.
On 11th March 2021, it was reported by the New York Times that Co-founder and Chief Executive Officer (CEO) of Twitter, Jack Dorsey was trying to sell his first tweet. On Tuesday, March 23 2021, his first ever tweet “just setting up twttr” sold for $2.9 million. It was purchased by a Malaysia-based businessman. The tweet was first published on 21st March 2006.
Virtual Sneaker brand RTFTK Studios made $3.1 million in the space of 7 minutes as it sold 600 pairs of NFT products.
It was reported by the Rolling Stones website that Kings of Leon (rock band) is the first group to release an album in the music industry in a series of digital tokens. On Friday, March 26, 2021, “When You See Yourself'' became available in three separate NFT formats at a starting price of $50, each with extra enhancements.
On Monday, 15th March 2021, Tesla founder and CEO, Elon Musk offered to sell one of his tweets as an NFT. On Tuesday, March 16, he decided against selling after receiving a $1 million offer by an anonymous buyer. It contained a song which had the lyrics: “NFT for your vanity. Computers never sleep. It’s verified. It’s guaranteed.”
On Wednesday (10th March, 2021), Pipe-Smoking Alien CryptoPunk (CryptoPunk #7804) NFT sold for $7.6 million.
Looking at the actions of some of the buyers who remain anonymous and later put the same digital token on the market, certifies NFTs as NOT a digital asset which is purchased to become dormant in an online address on a certain blockchain.
Non-fungible tokens can also be used as a store of value which would bring great returns to the holder of the digital asset, just as there are so many non-fungible tokens listed on NFT marketplaces that are yearning for buyers.
What Are NFTs In Cryptocurrency?
Parent crypto Bitcoin (BTC) and major altcoins have the same value which means that 1 ETH can be represented in another form as 0.5 ETH + 0.5 ETH which will equal, 1 ETH.
NFTs can be compared to Baseball Cards or cards in professional sports, come with different values for each token and do NOT have a medium of exchange as part of its primary functions.
Simply put, it cannot be used to purchase goods on an online store like ETH, BTC, DASH, ADA, TRX, DOGE, XLM and LTC among others. Like major cryptocurrencies, it runs on blockchain through smart contracts and can only exist on your personal or business computer. They come in the form of games, films, songs and artworks.
What Blockchains Are NFTs On?
Currently, NFTs run on several blockchains but the most popular ones are Ethereum (ETH), Polkadot (DOT) Tezos (XTZ) and Flow (FLOW).
As a trader or investor who wants to know more about this NFT Mania, you should know that non fungible tokens were developed by the same people who saw to the development of the ERC-20 smart contract which brought about several innovative blockchains as well as tradable tokens.
Non-fungible tokens evolved from the ERC-721 standard. As Rakesh Sharma of Investopedia puts it, “It defines the minimum interface – ownership details, security, and metadata- required for exchange and distribution of gaming tokens”.
The concept is taken a bit further by the ERC-1155 standard. This plays a primary role in seeing to a reduction of the storage and transaction costs which is required for NFTs and batching multiple types of non-fungible tokens into one contract.
With so much competition in the decentralized finance (DeFi) space, Charles Hoskinson’s Cardano (ADA) and Justin Sun’s Tron (TRX) look forward to getting more NFT platforms on their blockchains.
After Cardano launched on Coinbase Pro, its market capitalization began to soar substantially due to news of having several negotiations with some of the major NFT platforms as well as finally introducing smart contracts on the network of Cardano.
Charles Hoskinson pointed out that “Cardano is in negotiations with several platforms about switching their transactions from Ethereum to Cardano’s ADA token”.
On Monday, 22nd March, 2021, it was announced on major finance news outlets that TRON has established a strategic partnership with MixMarvel to bring more NFTs and digital content to TRONs ecosystem. This partnership will also bring technological solution Rocket Protocol 2.O, Wallet SDK to the TRON ecosystem.
MixMarvel is a blockchain game publishing platform and confirmed the partnership by announcing via social media platform (Twitter) and excerpts of the tweet go, “@MIXMARVELGAME #NFT gaming platform has its protocol and wallet integrated by @Tronfoundation $TRX #Tron #TRX”.
Chief Executive Officer of MixMarvel, Yiyi He – Co – speaking of this partnership pointed out that “TRON (TRX) has one of the most active and biggest communities in the entire crypto finance space and is one of the best-known platforms in the blockchain market”.
Founder, Justin Sun responded by pointing out that “In 2021, TRON (TRX) is making a commitment and investment into art by fostering the growth of non fungible tokens (NFTs); partnering with the top NFT and digital content project is integral to the initiative of TRON. NFTs are a revolution of our generation and we are excited to be collaborating with MixMarvel, a renowned platform to bring an NFT marketplace and wallet to the Tron ecosystem”.
For the time being, Ethereum (ETH) as the first mover of smart contracts leads the way in decentralized finance (DeFi) in terms of the top-performing DAPPS. Time will tell if Ethereum (ETH) can also maintain the lead with regards to NFT platforms with Flow (FLOW), Neo (NEO), Tezos (XTZ) and Polkadot (DOT) closing in on the category of top performing platforms and the blockchains they run on.
It will be interesting to see the kind of partnerships Cardano especially will forge and how it would perform in the future with an aim towards dethroning Ethereum (ETH) and colonizing the whole decentralized finance (DeFi) space.
What NFT Platforms Run on Ethereum and How Does It Contribute to Its Performance?
The market for non fungible tokens has grown exponentially. It may come as a surprise to you as a trader or investor, but from 2019 to 2020, NFTs market capitalization rose nearly 50% from $210,000,000 to $315,000,000. A little over $167 million were purchased up until the beginning of the year, 2021.
As per data retrieved from SANBASE (an online portal which serves as a behavior, analysis and monitoring platform), demand for NFTs have taken its market capitalization to $11.08 billion with a trade volume of $2.05 billion within the last seven (7) days.
There are several NFT platforms running on the Ethereum blockchain and a handful of them have been selected with a thorough discussion on their prices, trade volumes and market capitalization, how they have impacted the market valuation of Ether (as a cryptocurrency) and the whole Ethereum project as a whole.
Chiliz is one of the largest blockchains for esports and gaming crowdfunding which was launched in 2019. On its digital website, Chiliz tags itself as the world’s leading blockchain Fintech provider for sports and entertainment.
As per data retrieved from CoinMarketCap, Chiliz, represented by its ticker symbol, CHZ has a trading price of $0.5061, trade volume of $791 million and a market capitalization of $2.82 billion in the last 24 hours. CHZ has a circulating supply of 5,586,361,319 CHZ out of a total supply of 8,888,888,888 CHZ.
Chiliz has benefited from the crypto boom of 2021 led by parent crypto (BTC) reaching an all-time high of $0.8915 on 13th March 2021. The NFT has returned 2,273.83% Year-To-Date (YTD) having opened at 0.02132 on the 1st day of January.
Enjin, launched in 2018 runs on the Ethereum blockchain and allows developers of games to tokenize in-game items. As a company, Enjin is focused on the creation of digital collectible items which are truly owned by the user. The Enjin Network is its flagship project which is a social media platform which allows users to create clans, websites, and chat as well as host virtual item stores. Its novel token is the Enjin Coin which is an ERC-20 token.
Represented by its ticker symbol ENJ on cryptocurrency exchanges, Enjin has a price of $2.60, trade volume of $290.95 million and a market capitalization of $2.17 billion in the last 24 hours. ENJ has a circulating supply of 834,313,757 ENJ out of a total supply of 1,000,000,000.
Enjin, like many altcoins, has become a beneficiary of the crypto boom of 2021 which is led by BTC and reached an all-time high of $3.05 on March 15, 2021. The NFT has returned 1,890.81 gains Year-To-Date (YTD) after opening at $0.1306 on the 1st day of January.
Decentraland was co-founded by Esteban Ordano and Ariel Meilich in 2017. Powered by the blockchain of Ethereum (ETH), decentraland tags itself as a virtual reality platform owned by its users who are allowed to experience, create and monetize applications and content.
Simplistically, users purchase a plot of land in a virtual world which they build upon, navigate as well as monetize. Unlike decentralized finance applications, Decentraland has two (2) tokens which are MANA and LAND. An ERC-20 token (MANA) must be burned by its users in order to acquire non-fungible (ERC-721) tokens (LAND).
Aside from MANA being used as the primary ticker symbol of the DAPP, it also plays a role in serving as a medium of exchange for the payment of a range of names, avatars and wearables, as well as more items on the marketplace of Decentraland.
MANA has a trading price of $1.04, trade volume of $285.76 million and a market capitalization of $1.64 billion in the last 24 hours. MANA has a circulating supply of 1,578,131,113 out of a total supply of 2,194,501,727.
Decentraland was one of the tradable tokens blessed by the fortunes of the crypto boom as it reached an all-time of $1.19 on 14th March, 2021. The NFT has returned 1,229.70% gains Year-To-Date (YTD), having opened at $1.04 on January 1.
Ethernity Chain was created by Nick Rose Ntertsas in 2021 to help convert crypto enthusiasts into users of the Ethernity platform so that they can take advantage of non-fungible tokens (NFTs).
Originally as a decentralized finance (DeFi) project which has authenticated NFTs, Ethernity Chain’s novel token “ERN” is based on the Ethereum blockchain. On its digital address (website), the crypto finance asset tags itself as a platform where users can find limited-edition NFTs and trading cards which are created by elite artists and authenticated by industry icons. Additionally, users can also get NFTs through auction sales or by farming ERC-20 (ERN) to get rewards which they can use to redeem cards.
ERN has a trading price of $53.06, trade volume of $20.24 million and a market capitalization of $311.26 million in the last 24 hours. ERN has a circulating supply of 5,863,719 from a maximum supply of 30,000,000.
Ethernity Chain like all other altcoins followed the bullish patterns of BTC in 2021 and reached an all-time high of $74.13 on 27th March. The NFT which is helping people take advantage of the possibilities of the tokens has returned 2,253.33% gains Year-To-Date (YTD) since its launch on March 8 where it opened at a price of $3.15.
Dego Finance was developed by an anonymous team in 2020 which remains unknown as of March 2021. As a stand-alone (independent), open non fungible token ecosystem, Dego Finance makes it possible for anyone to issue NFTs, initiate mining, auctions as well as trade. It is traded on cryptocurrency exchanges with a ticker symbol, DEGO.
Dego Finance has a trading price of $16.99, trade volume of $23.8 million and market capitalization of $146.23 million in the last 24 hours. DEGO has a circulating supply of $8,607,383 with no data for maximum supply.
As a beneficiary of the crypto finance boom as a result of a resurrection of the whole finance space after the March lows suffered in 2020, DEGO hit an all-time high of $33.82 on 14th March 2021. It has so far returned 3,154.79% gains Year-To-Date (YTD), having opened at $0.522 on the 1st day of January.
Meme was founded by product lead for DeFi at ConSenSys, Jordan Lyall as a tongue-in-cheek reaction to the rise of DeFi token trading phenomenon in 2020 where several projects survive and others who tag themselves as the new colonizers of the whole decentralized finance space go bust. Meme runs on the Ethereum blockchain with MEME as its novel token. Meme has a trading price of $2,935.63, trade volume of $6.87 million and market capitalization of $82.06 million in the last 24 hours.
MEME has a circulating supply of 28,000 which is the same as maximum and total supply. Although it started as a joke just like Dogecoin (DOGE), Meme has performed extremely well gaining a new all-time high of $3,982.28 on 24th March 2021. MEME has returned 632.278% gains Year-To-Date (YTD), after exchanging hands for $400.89 on the 1st day of January 2021.
MUSE is one of the top-performing NFTs running on the blockchain. MUSE has a trading price of $83.13, trade volume of $2.51 million and a market capitalization of $42.27 million in the last 24 hours. MUSE has a circulating supply of 508,554 which is the same as its total supply. MUSE reached $125.90 which is the all-time high and has so returned 24,443.8% gains Year-To-Date (YTD), after trading for a coin at $0.3387 on the 1st day of January.
Others include The Sandbox (SAND) is a gaming platform which runs on the Ethereum blockchain which has a trading price of $0.78466, trade volume of $210.37 million and a market capitalization of $538.92 million.
My Neighbor Alice (ALICE) is a gaming platform which runs on the blockchain of Ethereum and has a price of $14.79, trade volume of $33.87 million and a market capitalization of $257.27 million.
Axie Infinity (AXS) is a gaming platform running on ETH, has a price of $5.68, volume of $44.51 million and a market capitalization of $245.7 million.
Bounce Token (AUCTION) specializes in yield farming in DeFi and also runs on Ethereum and other blockchains. It has a price of $35.76, trade volume of $5.62 million and a market capitalization of $74.52 million.
LUKSO (LYXe) is a blockchain network that runs on Ethereum and provides NFT services. It has a price of $17.67, trade volume of $4.58 million and a market capitalization of $67.21 million.
Aavegotchi GHST Token (GHST) is a gaming platform that has a price of $1.36, trade volume of $24.97 million and a market capitalization of $60.91 million.
The PALM Platform for NFTs is connected to Ethereum (ETH) and has started making some strong connections with art industry experts which will boost Ethereum’s image in the non fungible side of decentralized finance.
PALM is a new crypto technology as well as token which was created by ConSenSys (a developer group at the heart of ETH which works with Art Company Heni Group and Heyday Films).
On Monday, 29th March 2021 it was reported by Business Insider that superstar artist Damien Hirst will sell 10,000 Non-Fungible Tokens (NFTs) using PALM. The artist is mostly famous for pickling sharks and encrusting skulls with diamonds.
The developers pointed out that PALM chose to be connected to the blockchain of Ethereum because its unique features will enable artworks to be encrypted and secured in a more environmentally friendly way.
With a keen eye on the data provided above, there is great investor interest in the asset which points to a long term growth in the market valuation of Non-Fungible Tokens (NFTs).
With millions in volumes for several NFT platforms running on Ethereum (ETH), these assets have had an invaluable role in Ethereum’s rally to an all-time high of $2,036 in February and a new all-time high of $2,152.45 recorded on 2nd April 2021.
NFTs are here to stay and altcoins which have great technology in the form of blockchains which can host it will continuously see a huge increase in price.
Which NFT Platforms Run On FLOW and How Do They Impact Its Performance?
Flow (FLOW) is one of the fastest developer-friendly and decentralized blockchain which was designed as the foundation for a new generation of applications and games which are powered by digital assets.
Polkadot (DOT) has four layers, Tron (TRX) has three Cardano (ADA) has two layers but Flow is so far the only one layer blockchain which has been originally created by a team which has consistently presented great experiences to its users through its blockchain.
Flow is behind NBA Top Shot, Crypto Kitties and Dapper Wallet. The original creator behind the creation of the Flow blockchain is Dapper Labs. Dapper Labs was founded in 2018 and has used its technological solution to bring to users around the world several forms of digital entertainment. FLOW is the novel token which powers the network.
After the explosion of NFTs and other digital applications, Dapper Labs have been able to raise $305 million in a new round of funding which will serve as seed money for the development of more technological innovations which would include NFTs and other DeFi applications.
Built by Dapper Labs and published by Animoca Brands, after its inception in October 2020, NBA Top Shot has surpassed the $500 million mark in sales.
In a statement, a representative of FLOW pointed out that, “The success of NBA Top Shot also established that Flow, the blockchain to handle mainstream consumer applications at scale, can support mass adoption, which is something which separates it from its blockchain predecessors”.
One of the major advantages of Flow is that it enables an NFT marketplace and other DAPPS scale faster to be able to meet the demand without any environmental concerns (Carbon emissions) which comes at a relatively lower cost.
At the time of writing this article, FLOW had a trading price of $32.48, trade volume of $129.72 million and a market capitalization of $988.49 million. FLOW has a circulating supply of 30,431,019 from a maximum supply of 1,338,178,864.
Such daily volumes and market capitalization shows investor interest which is backed by the amount of sales on the Flow platform. With the round of investments done, Flow would create more DAPPS and NFTs which will see it rival Ethereum (ETH) as the king of smart contracts as to which smart contracts blockchain have the highest number of top-performing non-fungible tokens across sports collectibles, art and music.
Are NFTs Bad For The Environment?
Yes, after NFTs emerged in 2017 with CryptoKitties as the first mainstream experiment which achieved success, other developers joined in to make gains from the crypto boom and this has brought about extensive environmental challenges for the global world.
Non fungible tokens solely depend on the technological solution (blockchain) to become fully functional. Using blockchain means that NFTs employ a lot of energy. It is a known fact that Bitcoin (the first blockchain technology) requires a substantial computing power when confirming transactions.
Ethereum (ETH) as the first mover of smart contracts controls more than 70% of the NFT market. The smart contract network made an upgrade from Ethereum 1.O to Ethereum 2.O on 1st December 2020. Unfortunately, several blockchain experts have forecasted somewhere around the second half of 2022 before Ethereum 2.O which employs proof-of-stake (POS) algorithm can become fully functional.
With that said, several NFTs are still relying on the template of the longstanding SHA-256 proof-of-work algorithm brought forth by Bitcoin (BTC). The main practical significance of this algorithm is its impact on the process of “mining” new coins. This means that miners must meet the demands of custom hardware solutions which are Application-Specific Integrated Circuits (ASICs).
As a result of this, Ethereum (ETH) uses about 31 terawatt-hours (TWh) of electricity annually (roughly the same amount of energy input for Nigeria in sub-Saharan Africa).
It is extremely difficult to blame this or that founder of crypto technology for the carbon emissions the global world faces since other blockchains have joined Ethereum (ETH) in meeting consumer demands.
Crypto enthusiasts and expert investors know that with or without non fungible tokens, Ethereum (ETH) will still be powered by its DAPPs since it controls more than 85% of that space. Presently, buyers and sellers of digital arts are the people who can take responsibility for the high energy consumptions to help limit the effects of carbon emissions.
Artist Damien Hirst would be releasing a series of his work which is collectively known as The Currency Project on PALM which is linked to the blockchain of Ethereum. Bitcoin (BTC) is the payment method he has chosen to receive his payments. Suppose it sells for a huge amount of money, transaction validation and confirmation will come with a hefty carbon baggage for the environment.
Artist Prioritizing the Environment over Their Digital Work
Joanie Lemercier is a digital artist of French descent, currently based in Belgium, cancelled the sale of six of his works after realizing the enormous amount of energy that will be associated with the sale. In a space of 10 seconds, the sale would use electricity which can power the entire studio of the artist for two years.
One of the renowned online platforms which showcase the portfolio of work by digital artists (ArtStation) upon seeing the boom and enormous gains made by others, launched a great NFT marketplace to expose the works of its clients. Widespread condemnation followed this development and ArtStation was forced to scrap the project due to the environmental costs involved.
The Way Forward
The NFT Mania and its contribution to bad environmental factors have made several people pose questions such as what are NFT arts and what is NFT music’s essence to the culture of art and entertainment since it does not have any physical presence. As a new craze has gained momentum, people are investing their stimulus checks to see where it would take them in the long term without focusing on the impact such activity has on their immediate environment.
Due to the damage done to the environment, several NFT creators have started using what is referred to as Carbon Offsets. An Offsetra company “Makes provision of an emissions calculator and sells carbon credits to offset emissions caused by NFT transactions”.
Carbon Credits relies on a belief that like NFTs, Carbon can immutably be locked away in some trees forever which depends on clever accounting. Unfortunately, no system can entirely eradicate carbon emissions, it can only reduce it.
Should people prioritize having a digital image they can claim ownership of or a store of value that can make them money at the expense of their environmental challenges?
How to Create Non Fungible Tokens?
Creating NFTs (GIF or an image) is fairly straightforward and easy which costs nothing.
The FIRST STEP is to IDENTIFY THE BLOCKCHAIN YOU WOULD WANT TO ISSUE YOUR NFTs. You can choose from Ethereum, WAX, Tezos, Polkadot, Cosmos, Tron, EOS, Binance Smart Chain and Flow by Dapper Labs.
It must be noted that every blockchain comes with its own unique NFT Token Standard, marketplaces as well as compatible wallet services.
The SECOND STEP is to MINT YOUR OWN NFT ARTWORK. For the purpose of education and understanding, Trading Education will like to use Ethereum (ETH) since it’s the largest ecosystem to help explain how this process can be done.
You will need an Ethereum Wallet which supports Ethereum-based token standard (ERC-721).
Ether (ETH) in the price range of $50 to $100 will be needed to be stored on your wallet.
The THIRD STEP is to CHOOSE FROM A NUMBER OF NFT-CENTRIC PLATFORMS. You can choose OpenSea, Mintable and Rarible to allow you to connect your wallet and upload your chosen image of the file you want to convert into a non fungible token.
The FOURTH STEP is to CLICK CREATE. There will be a series of instructions to follow and your NFT token will be created and appear in as an artwork in your collection.
How to Buy Non Fungible Tokens?
After doing a thorough search about non-fungible tokens and the future potential it holds as a store of value in the crypto finance market, one of the prime areas which has been trending on search engines is where to buy NFTs.
As a result of several developers trying to make gains here and there, it is extremely important to find the right platform which would be able to hold up your digital assets. As an e-learning organization, our quest is to find you the right platform, so kindly follow the steps below and you would be on your way towards making your first NFT purchase.
The FIRST STEP is to BUY ETHER (ETH).
We would like to recommend eToro as the brokerage of choice for the purchasing of ETH coins. Purchasing ETH is extremely essential because most NFTs are Ethereum-based tokens (ERC-721) and many NFT marketplaces accept ETH as payments for collectibles.
The SECOND STEP is to CREATE AN NFT MARKETPLACE ACCOUNT.
There are several NFT marketplaces which are Opensea, SuperRare, Nifty Gateway, NBA Top Shot, Mintable, Rarible and Sorare. Once you are done creating an account on eToro and having your ETH, your cryptocurrency can be sent to your NFT marketplace.
The THIRD STEP is to BUY YOUR NON-FUNGIBLE TOKEN (NFT).
Once you have been able to fund your NFT marketplace account, you can buy an NFT. Many of the marketplaces come in the form of an AUCTION FORMAT. With this, you would have to submit a bid for the NFT you want to buy and once it is accepted, it would be processed and added to your account.
For marketplaces that operate like exchanges traders and investors are used to, NFTs which have several prints are sold using the lowest ask and highest bid.
Does NFTs Have A Future?
Yes, NFTs do have a future in the current world of decentralized finance (DeFi). Ethereum (ETH) continues to lead the way in terms of top-performing NFT platforms running on its network with Chiliz (CHZ), Enjin Coin (ENJ) and Decentraland (MANA).
Neo (NEO) has Phantasma Protocol (SOUL) while Polkadot (DOT), Tezos (XTZ), Cardano (ADA), Tron (TRX) and Binance (BNB) continues to form partnerships with developers to be able to provide great NFTs with great values to challenge the smart contract blockchain’s dominance over the DeFi space.
With that said, up until the end of January 2021, the total market capitalization of the non-fungible token market stood at $315 million. As at 3rd April 2021, the market capitalization of NFTs stands at $10.86 billion and a trade volume of $1.86 billion as per data retrieved from behaviour, analysis and monitoring platform (SANBASE) over the last 30 days. In the process, NFTs have increased by 3,347.62% signifying huge investor interest.
With developer activity on NFT platforms increasing substantially in value, art expert Noah Davis of Christie’s Auction House in New York has weighed in on the future of NFTs.
As per the specialist who was in charge of the first NFT auction at Christie’s, “The potential for NFTs to disrupt the traditional art auction model is humongous. Beyond the record-setting sale of Beeple’s EVERYDAYS, the digital asset's lack of objecthood means auction houses face no cost required for storing, handling, cataloging, photographing as well as insuring the physical work of art which makes it a really attractive opportunity for auction houses”.
The art specialist pointed out that the auction house will definitely be offering more NFT artworks but this does not mean the tokens are going to replace sculptures and paintings at auctions.
Because of the promise it has shown, as an investor, you can make a purchase of one or two NFTs. Whatever happens it can be stored as a valuable digital asset that could resold for a much higher price when that piece becomes relevant in the near future.
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