NFTs are currently creating waves in the cryptocurrency space. Yes, NFTs are as strange as you think they are. They are basically a new way to spend your money or make a considerable fortune. NFTs have easily surpassed cryptocurrencies when it comes to hype and popularity.
So what exactly are NFTs? Non-fungible tokens (NFT in short) are digital assets. These assets represent a range of tangible and intangible items. The items could be anything, ranging from collectibles like sports cards, music album art. They could also be virtual real-estate or even sneakers that have been created digitally. So as you can see, NFTs can be pretty much whatever you want them to be.
However, NFTs differ from traditional physical collectible items like, say, a painting or a collectible card. NFTs are entirely digital and could represent a tweet, a meme, or even a gif.
What Exactly Is An NFT?
To understand what an NFT is, you must keep an open mind. NFTs are unique digital tokens. Most of the NFTs in existence today are based on Ethereum, using the Ethereum blockchain to record all transactions. NFTs are different from cryptocurrencies. The latter are fungible assets, which means that you can exchange one cryptocurrency for another cryptocurrency. They are also divisible. NFTs being non-fungible, cannot be exchanged for another NFT because each NFT is unique.
One of the most significant benefits of NFTs over physical collectible items like coins or cards is that each NFT contains unique information that differentiates it from other NFTs. This ensures that fake collectibles are kept in check because each item can be traced back to its owner. No two NFTs are alike, even if they share the same platform, or are part of the same game, or even part of the same platform.
A good analogy to understand them would be concert tickets. Each ticket is unique and contains information about the individual who has purchased that particular ticket, the venue of the concert, and the concert’s date. Such unique data makes it impossible to trade one ticket with another.
Almost all NFTs are based on the Ethereum blockchain using one of two Ethereum token standards. These are the ERC-721 token and the ERC-1155 token. Using these tokens ensures that developers can easily deploy NFTs and ensure their compatibility with the broader crypto ecosystem and services like MyEtherWallet and MetaMask. Other blockchains like EOS and Tron have also gotten in on the act, releasing their own NFT token standards, hoping developers build NFTs on their blockchain.
What Are Some Of The Characteristics Of NFTs?
NFTs have several characteristics that make them unique. Some of the characteristics are
- NFTs are not interoperable: NFTs are not interoperable, which means that one NFT cannot be used in place of another. For example, a CryptoKitty cannot be used as a character on the CryptoPunk game, and vice versa.
- NFTs are indivisible: NFTs cannot be divided, unlike fungible assets like Bitcoin that can be further divided into Satoshis. NFTs exist as a whole and cannot be divided.
- NFTs are verifiable: Since all data with respect to NFTs is stored on the blockchain, digital collectible items can easily be traced back to their original creator or owner. This allows easy verification and authentication of the NFTs without any third-party interference.
- NFTs are indestructible: NFTs run on blockchain technology, utilizing smart contracts to store data on the Ethereum blockchain. This ensures that each NFT cannot be destroyed or duplicated. The ownership of the NFTs is also immutable, which means that collectors actually own their NFTs. This is different from purchasing a song or an album from a music streaming service where the user who buys the song or the album doesn’t actually own it.
Why Are NFTs Gaining Popularity?
NFTs have become spectacularly popular with users in the crypto space, gamers and collectors because they have completely revolutionized the collectible and gaming space. The market capitalization of NFTs crossed $300 million by the end of 2020.
Blockchain technology has made it possible for collectors and gamers to become the immutable owners of the unique digital assets and in-game items, allowing them to monetize them. Users have also been able to monetize virtual properties like Casinos and theme parks that are created in virtual worlds like The Sandbox. They can also sell digital items like avatars, costumes, and in-game currencies in secondary markets.
NFTs have also allowed artists to sell their artwork in digital form to buyers globally without the need for an auction house or art gallery. This allows them to make more profits from sales. Smart contracts also allow royalties to be programmed into the artwork, allowing the artists to receive a royalty or a percentage of sales each time the NFT is sold to a new buyer.
A Few Examples Of NFT Sales
NFTs have a huge market, just like rare collectible baseball cards and limited edition toys. Buyers tend to be people who understand the value of digital assets. The target of NFTs were mostly individuals who were cryptocurrency enthusiasts. NFTs for digital art and games is a huge business. Here are some truly staggering examples.
- An NFT art piece by digital artist Beeple sold for $69.3 million at a Christie’s auction.
- Dragon is one of the most expensive CryptoKitties in the NFT space, currently valued at 600 ETH.
- The “1-1-1” car from F1 Delta sold for 415.5 ETH in 2019.
- A character, Angel, from the NFT-based game Axie Infinity, sold for 319 ETH.
- A digital collectible card of basketball legend LeBron James sold for $100,000.
Polkamon brings 3D NFTs to the digital collectibles space. Users can collect ultra-rare Digital Monsters which can be integrated into various blockchain-connected products.
Polkamon are animated, digital collectibles. Each collectible is unique and has varying degrees of scarcity. Each Polkamon is also backed by a unique NFT and can be unpacked using $PMON tokens. Each Polkamon has a rich metadata set that describes the properties of each unique Polkamon. They can also be integrated into Layer 2 applications.
All Polkamon are backed by non-fungible tokens, allowing the owners of different Polkamon to integrate them into their collection of art or in games.
What Are The Ways In Which Polkamon Can Be Utilized?
Polkamon can be utilized in several different ways. Polkamon differ from physical collectibles because they are digital collectibles that are backed by non-fungible tokens. They can easily be connected to different products on different blockchains. Some of the uses of Polkamon are
- Layer 2 Utilization: Polkamon is easily integrated into Layer 2 utilization applications. Each Polkamon has a rich meta-data set that describes the individual properties of each unique Polkamon.
- Proof of Ownership: Polkamon is backed by non-fungible tokens, which give them a significant advantage. The proof of ownership is immutable, and the owners can integrate the Polkamon into their collection or use them as an in-game asset.
There will be an upcoming IDO which is set to take place on Polkastarter, more details surrounding the $PMON sale are set to be announced by the team. Polkamon hopes to kickstart the NFT-based collectibles space. The team behind Polkamon hopes to grow and enrich the ecosystem with the help of a new type of NFT-based collectible.