When a celebrity does something, it gets immense popularity, and that is what happening in the crypto space in recent times. Celebrities and artists are selling their artwork for cryptocurrencies. For instance, Chris Torres who created the Nyan Cat, a popular meme on the internet platform sold out one of his creations, a viral GIF for three hundred Ethereum.
Similarly, there is musician Grimes who sold her crypto art using non-fungible tokens worth $5.8 million. The Crypto industry is booming and the NFT space is getting flooded with celebrities and general crypto enthusiasts as well. So, here in this article, we will elaborate on non-fungible tokens which are taking the crypto industry by storm.
NFT or Nun-fungible tokens are known for their uniqueness. They are cryptographic tokens that are one-of-its-kind and known for their unique set of characteristics. They are also referred to as collectibles and antiques. The value of the NFTs is usually due to the uniqueness they hold. These digital assets are not interchangeable as they are different from each other. Each NFT defines different characteristics and has a unique value.
Non-fungible tokens can into existence in 2017. It started with a game – ‘Cryptokitties’ where the players have to buy limited edition ‘virtual cats’ and also ‘breed’ the same which means generating them. These are used to provide the players with prizes for the games they win. The game developers started using the NFTs for these prizes, collectibles, and other in-game rewards. These tokens can be transferred to other players as well using NFT specialized blockchain marketplace. However, these tokens have become popular because of the digital artists and the other celebrities who sell their collectibles and artwork for NFTs.
The primary characteristic which set NFTs apart are –
Non-fungible tokens work differently from other digital assets. They being unique with their own sets of characteristics cannot be manipulated in any way. You can prove that the tokens are yours as they have ownership. You can hold it for eternity as well as sell the same. In some of the NFTs, the resale royalties are acquired by the original creator of the tokens. Whenever NFT holders sell their tokens, they earn royalties.
The NFTs can be kept in Ethereum based wallets and they remain there safely. There is no need for any intermediary for selling these tokens. You can sell the tokens in the open market as well as in a peer-to-peer setup. For the NFTs, you can determine the scarcity as well.
Two aspects that need to be understood in respect to Non-fungible tokens are Scarcity and Royalties.
When you sell the NFTs, royalties are being paid to the creators as well as the sellers (holders). It is one of the most powerful concepts which are still in its nascent stage of development. Even there are some of the platforms which have royalties for their artists as well. It works automatically, so whenever there is a sale of the NFT, the royalty for the same gets credited into the account of its creator automatically. However, the royalty programming should be done right to get the royalties in your account automatically otherwise it is difficult as everything else is still manually processed and very slow.
The creator of the Non-fungible tokens can decide the scarcity of the digital assets they create. Since every NFT is unique thus the creator can create and fix the number of NFTs. Each of the NFTs will be different from each other slightly and that is where the uniqueness lies. Now the creator can decide whether all the NFTs will be similar with slight differences or there will be a few with major differences which can be collected as collectibles as well.
The value of non-fungible tokens is derived from their uniqueness. As each of the non-fungible tokens is unique, each represents a value that is different from the other. It is not the same with other digital assets like Bitcoin or others where the value is the same and determined by demand and supply. Here the value is determined by the scarcity, rarity, and uniqueness of the tokens.
If you want to buy Non-fungible tokens, you can follow the below-mentioned steps –
The process of creating and selling the NFTs is as follows –
Here the list of five top most expensive NFTs around the world –
|Basis||Fungible Tokens||Non-Fungible Tokens|
|Inter-changeability||These tokens can be interchanged with other similar tokens as they have similar values.||These tokens have different values and a unique set of characteristics, so they cannot be interchanged.|
|Value||The value of these tokens is derived from the market action.||The value of NFTs is determined by the uniqueness of the tokens.|
|Owner||There is no specific owner or creator of Fungible tokens.||These tokens have one individual creator and owner.|
|Divisibility||These tokens are divisible||NFTs cannot be divided into multiple tokens.|
|Token standards||It is dependent on the ERC- 20 standard||It is dependent on the ERC-721.|
The future of non-fungible tokens seems to be promising with the growing number of artists and celebrities taking interest in these tokens. The overall market for these tokens is becoming huge day by day and analysts anticipate it to grow further. The investors are embracing the short-term risks of these tokens to achieve the long-term benefits.
Non-fungible tokens are one of their kind and thus they are becoming attractive as the days are passing. Not only the celebrities and the artists but the investors and crypto-enthusiasts are taking interest in this market. The future seems to be brighter for the NFTs. It is mainly due to its uniqueness and scarcity and different sets of characteristics that are bringing variety in the decentralized financial structure.
No, NFTs cannot be divided into multiple tokens. These tokens have unique characteristics and thus indivisible.
NFTs can be created by anyone. If you have something unique to sell or monetize like art, painting, GIF, and anything of that sort, you can create NFT out of it and sell.
Non-fungible tokens are risky investments but the value and popularity of these tokens in the current market scenario suggest the risk is short-term. There are long-term benefits as well.
You can earn royalty from the NFT you have created if you have integrated the royalty program in your NFT.
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