Perhaps you have heard of something called NFT’s or Non-Fungible Tokens. They are digital assets that represent something unique, stored on the Blockchain where ownership and the creator can be tracked and ensured. This article will cover what an NFT is, and example use cases.
Something fungible is an item that has no unique characteristics that differentiate it from any of its kind. So it can easily be replaced by another. For example, if you have one BTC or a US Dollar. These can be traded or swapped, and you are not concerned if you get the original coin or paper bill back as long as you get a BTC or a USD. So, to put it simply, non-fungible things can be seen as the opposite. Like a house, a cat or a dog, or a drawing. Even if you buy another house, it will never be exactly the same, even if it’s the same kind. Same with a dog or cat. Another good example of non-fungible items is an airline ticket. It may look to be the same, but still, it’s different, as each ticket has its own seat on the plane and might give you access to different areas of the aircraft.
So, circling back around to defining a non-fungible token can be seen as a digital asset on the Blockchain that represents a digital version of something non-fungible.
You might have recently heard about celebrities and artists who started to sell NFT’s that represent digital originals of something they have created? So an NFT token could also be a piece of digital art, a photo, video, or something representing a digital copy of a real-world asset.
Like in the physical world, you can also create copies of an original, and there can be similar NFT’s with a different purpose. Like we have airline tickets or posters or prints of famous drawings, there can also be digital copies of an original NFT.
So, from that perspective, we can say that the NFT represents the digitization of what might already exist in the physical world. The NFT becomes the original of a real-world asset or something created digitally.
As we all know, a drawing or a song created by someone famous most often attracts more buyers and a higher price than something similar from a non-famous person.
As the current pandemic caused many challenges for Music artists and other celebrities, the NFT space has allowed them to create something new and benefit from this digital evolution to create digital original content connected to themselves.
Some history of NFTs
Before we continue, let’s first go back in time a few years.
NFT’s can be traced back to 2012 with the Colored Coins, which was meant to act as a token representing different values or use cases. For example, a specific color of a token could issue the owner shares of a company or access to something.
In 2017, we saw the popularity of CryptoPunks and CryptoKitties, where users could purchase, collect, and trade unique digital punks and kitties with each other. In 2018–2019 the NFT market for these digital assets grew exponentially.
Bying and Selling NFTs
NFT’s are created when a file is uploaded to an NFT auction platform, which users can purchase with cryptocurrency. When a file is uploaded, it creates a copy of the original to the Blockchain. The file owner can sell an NFT of the original file but retain ownership of the original. A good media analogy would be an autograph. Some examples of NFT’s are art pieces, video game-created avatars, and even tokenized real-world assets.
But the NFT can also represent something else. It can also be an access token that gives the holder certain benefits like a VIP badge that allows you to enter a specific area or club membership, giving you discounts or other benefits. Someone who holds a certain NFT might get something back just by holding it, even if the token itself has no real value.
Considering this fact, we can expound our understanding that an NFT could be a digital original / a copy of the original that represents a tokenized asset or an access token that allows for certain benefits for the owner.
All NFT’s can be traced back to their original creators on the Blockchain. Through the auction platform comes the NFT authentication by a third-party confirmation.
Different protocols for supporting NFTs
Lately, there has been an increased interest in using NFT’s. Blockchains like Ethereum, Binance Smart Chain, and other protocols have their standards for supporting NFT’s. However, each protocol works to ensure that the digital item represented is authentic and one-of-a-kind.
Therefore, NFT’s are now being used to commodify a lot of different digital assets in art, music, sports, and other popular entertainment, besides the crypto world.
As blockchains help revolutionize different industries, it’s now possible to allow any value to be controlled by a computer program. Many NFTs are using the ERC721 or ERC1155 standard protocols, but as the technology evolves, the Binance Smart Chain versions BEP721 and BEP1155 have gained a lot of interest and traction in the NFT area.
The NFT market value tripled in 2020, reaching more than $250 million. But the rise of NFT transactions has also led to increased environmental criticism as the carbon emissions needed to process and maintain these proof-of-work blockchains have grown rapidly.
In the first three months of 2021 alone, more than $200 million were spent on NFT’s. The economic momentum NFT’s have in the crypto market has exploded because of a trend towards digital collectibles. NFT’s are also accelerating a more significant digital financial innovation trend as the public is increasingly favoring a crypto economy.
As we now see an increasing number of celebrities, sports teams, and artists creating their own NFT’s with music, digital trading cards, art, etc., it looks like NFT’s will continue their growth and not be slowing down any time soon. Review the website https://nonfungible.com/. It shows the thousands of NFT’s that have already been sold. There you can see a digital artist recently sold a single NFT for over $60 Million. This is the highest transaction for and NFT to date.
· Fungible is something that can easily be replaced by another of its kind, like a US dollar for another US dollar.
· Non-fungible is something that can be seen as something unique and cannot be replaced, like a pet (a dog or a cat) or a house, drawing, etc.
· Many celebrities and artists have been adopting NFT’s as it creates a new market for artists and famous people.
· The NFT market has grown rapidly over the last couple of years, and as celebrities bring the NFT’s to the mainstream, it looks to continue this path.
· NFT’s can represent both a digital original to create a value for the specific token or act as an access token that allows for certain benefits or shares in a company.
So, how do NFT’s connect to EcoCelium?
With our new Binance Smart Chain integration, each person who connects their wallet and adds funds to the EcoCelium platform will get an NFT token representing the tokens connected to the DeFi platform.
On top of this, there will be several access tokens that allow users to benefit from the platform and get additional rewards based on their contribution or level of holdings.
The work is currently ongoing to decide on new features that will be implemented in the future. Do you have ideas, or would you like to contribute to the team that sets the foundation for the EcoCelium platform? Connect with us through our social media channels, and we can tell you more.
Until next time, stay tuned and make sure you follow us on our social media channels to not miss out on future updates. And most importantly, don’t forget to visit ecocelium.org and try our DeFi Platform.