Its NFT Season: But What the Hell Is It?
Exploring NFTS, impact on the creator economy, and more
Technological advancement in the 21st century forces us to keep up with the latest trends in innovation or become dinosaurs.
One of the latest trends that have been on the lips of everyone in the tech sphere is NFTs but what the hell is it?
In this article, we will talk about NFTs, their impact on the creator economy, and some more juicy stuff.
Let’s get into it!
What Are NFTs?
NFTs is an abbreviation of the term — Non Fungible Tokens but before we go any further, let’s talk about the meaning of the word “fungible”.
According to Wikipedia, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable.
This means fungible assets can be exchanged and still remain the same in value — you can exchange a $100 bill for other $100 bills an infinite amount of times and you would still have the same amount of money.
Non-fungible tokens, on the other hand, cannot be exchanged because unlike a $100 bill, they are rare, unique, and cannot be replaced with something else.
Really! What Are NFTs?
NFTs are tokens minted on a blockchain that serves as a certificate of ownership for a digital item.
Sitting on blockchain technology gives it authenticity and one-of-a-kind value, unlike cryptocurrencies, NFTs cannot be traded for each other because each NFT carries a different type of value.
The minting process is basically, listing your digital item on a marketplace that runs on the Ethereum blockchain.
These marketplaces are decentralized apps (Dapps) built on the Ethereum blockchain that can be accessed via wallets like Metamask, Coinbase wallet, Fortmatic, or other crypto wallets. Some examples of NFT market places are Rarible, Open Sea, Mintable, portion, and much more.
Minting an NFT usually requires fees called gas fees, which are paid in the Ethereum’s platform native currency, Ether. Although some marketplaces like Mintable allow you to mint your first NFT for free, other marketplaces require these fees.
These marketplaces basically allow you to upload your digital item, the same way you would put it up for sale on eBay.
Once you upload your item on the marketplace and sort out your smart contract, your digital item gets minted on the blockchain and you become the newest NFT owner on the block.
NFTs could be art, collectibles, GIFs, game characters, music, the possibilities are endless for digital items.
“If a digital good lives on a blockchain, you actually own it. It exists outside any one digital environment and it is permanent. This is why I believe NFT’s have a bright future. Digital goods have always had an ownership problem, and NFT’s are a way to fix it.” — Duncan Cock Foster, CEO Nifty Gateway
Brief Evolution of NFTs
Non-fungible tokens aren’t new phenoms, NFTs such as Colored Coins already existed in 2012 — but this version of NFT was on the Bitcoin blockchain and wasn’t as advanced as what is obtainable today.
In 2017, creative technologists John Watkinson and Matt Hall created CryptoPunks, a unique set of digital characters on the Ethereum blockchain.
This invention was the spark that was needed to light up the blockchain art industry and inspire a renaissance with the NFT ERC-721 standard.
Shortly after, came Cryptokitties, a digital game centered around breedable, collectible cats, and then came Decentraland, a fully decentralized digital game platform that allows users to buy up virtual land space.
Last year, the pandemic and lockdown rapidly fostered the adoption of NFTs as a new asset class and made it mainstream in 2021.
According to a report by Statista, the global NFT market had a market cap of $338 million by the end of 2020.
Latest NFT Trends and Impact on the Creator Economy
We are living in fascinating times, the widespread adoption of virtual art on a blockchain has triggered an artistic renaissance.
The creator economy is one of the biggest benefactors from this NFT boom, this decade has ushered in the new age of people monetizing their passion, and NFTs have provided a way for them to truly own it.
The blockchain technology that powers NFTs is designed to decentralize, authenticate, cut out intermediaries, and give power back to the people.
By democratizing the creator economy, more creators will earn what they truly deserve — NFTs allow creators to earn commissions from the resale of their work, the possibilities are growing all the time.
Digital artist Mike Winkelmann, popularly known as Beeple, is one of the biggest winners in the NFT game.
Beeple, who has a ritual of creating one piece of digital art a day since May 1, 2007, recently auctioned a collage of his first 5,000 pieces he produced as an NFT for a whooping sum of $69.3 million, making him the world’s third most expensive living artist.
Art isn’t the only thing that moves the NFT train.
Twitter CEO, Jack Dorsey recently auctioned his first tweet from 2006, it sold for over $2.9 million, the proceeds were converted into Bitcoin and donated to GiveDirectly, an African charity.
NBA Top Shot, a platform that sells GIFs and short clips of your favorite basketball moments as an NFT recently sold a clip of Lebron dunking for over $200,000, so far, the platform has generated over $230 million in sales.
Big brands like Nike aren’t left out. Nike recently approved a method of verifying the authenticity of their sneakers using an NFT system called Crytokicks
Even the richest man in the world is getting in on the NFT action. Elon Musk made an EDM song about NFTs and offered to sell it as an NFT but changed his mind about making the sale.
What more can I say? Non Fungible Tokens are the future and are rapidly becoming a growing asset class that fosters authenticity and trust not just for artists and creators, but for the entire world.
This exciting technology changes how creators and artists monetize their work and also how every other industry authenticates and verifies assets, in a truly remarkable and unprecedented way. What a time to be alive!
