NFTs 101: What are its uses?
Non-fungible tokens (NFTs) have become one of the greatest topics of interest recently, even though they have some years of existence. Others see it only as unique assets that are used for the digital representation of a physical asset or a digital asset on the blockchain. Their main characteristic is that they are finite and have been designed to have unique and digitally verifiable properties. These characteristics make NFTs perfect for the creation of digital art. If you have googled “NFT meaning” in order to know more about these financial assets, then you have come to the right place.
However, what we cannot deny is that the massive interest in NFTs has led to a boom in NFT crypto art. Obviously, these are two of the most prominent use cases in the DeFi ecosystem, but these are not the only uses they have. Scarcity and uniqueness make non-fungible tokens a good match for real-world assets, logistics, music royalties, and more.
With the growing popularity of NFTs, we will likely see even more ideas and use cases in the future. From real estate to logistics, you can use NFTs to prove the authenticity of many unique and collectible products. They soared in popularity during the pandemic, and the lesser-known artist Beeple sold his work NFT for USD 69 million in early 2021. By the end of last year, sales had risen to over USD 40 billion, according to a cryptographic data company, Chainalysis.
Here is where we stop for a moment and recognize that the NFT ecosystem is still incipient, but that there are many interesting projects to explore, and some are already generating great value for creators and consumers.
Real Estate and NFTs
The main idea is that NFTs can digitize the way we demonstrate ownership, by linking real-world assets with their platforms. Also, by having an NFT associated with an item, owning the NFT can become as important as owning the asset.
For example, in real estate, you usually deal with physical property deeds. In that sense, generating tokenized digital assets from these deeds can move highly illiquid items (such as a house or land) onto the blockchain. The only handicap is that in most cases, there is not much support from regulators. Therefore, you could say that this is still in development, but it is something to keep an eye on in the future.
Due to its immutability and transparency, Blockchain technology can also be useful in the logistics industry. How? Well, these aspects ensure that supply chain data remains authentic and reliable. With food, commodities, and other products, it is important to know where they have been and for how long.
An NFT also has the added benefit of representing unique items. Anyone can use an NFT crypto to track a product that contains metadata about its origins, journey, and warehouse location.
Music meets NFTs
You can also attach audio to an NFT to create a collectible piece of music, like an image file or a video. Think of this as a digital "first edition" of an album. NFTs have come to help with a big problem for musicians: getting a fair share of royalties. But there are at least two possible ways to achieve a balanced outcome: blockchain-based streaming platforms and blockchain royalty tracking. For instance, projects like Rocki on Binance Smart Chain offer independent artists a platform to sell royalties and stream their music. The first NFT royalty sale on the platform raised 40 ETH for 50% royalties using the ERC721 token standard.
Currently, not all applications of NFTs have had enough time to go beyond an idea or a small project. Some may not prove to be practical or popular. It is also clear that for more fundamental and simple issues, such as art and collectibles scarcity, NFTs are certainly here to stay. But if this worries you remember that everything we take for granted in our lives, today, was at one time not the usual or commonplace.
So far, we have seen relatively ‘common’ ways to use NFTs, but let’s get down to the less obvious scope of possibilities and analyze the role that NFTs could play in politics.
NFTs and Politics
Believe it or not, NFTs are also being used by political candidates to raise money and to attract young supporters. One example of this is what happened with Blake Masters, a Republican U.S. Senate candidate in Arizona, who has embraced NFT crypto. He is also the co-author of "Zero to One," a bestselling business book from 2014. Masters sold his supporters limited edition NFTs depicting the cover of his book and raised nearly USD 575K.
Another good example is Front Row, a marketplace where NFTs will serve as the digital version of campaign swag. This new platform for fundraising comes following a political reality emerging in the crypto world. "Our goal in launching Front Row is to build an NFT crypto platform for progressive causes that can engage more voters and give supporters a new medium to contribute to the movements they care about," said Parker Butterworth, one of the co-founders of Front Row. In the end, they aim to further connect the political and crypto communities.
From now on, NFTs could appear as an innovative technology in the political space for campaigns simply because they are a powerful mechanism for showing support for a candidate, even more than most of the options available right now. Political experts and campaign-focused tech new businesses are making a difference while driving the trend.
Best marketplaces for non-fungible tokens
NFT crypto marketplaces have sprung up in response to the growing popularity of their technology. There are a variety of NFT marketplaces to choose from, ranging from the well-known OpenSea to others more autonomous and community-based. The following is a list of NFT marketplaces where you can purchase or sell NFTs.
OpenSea is the first and largest peer-to-peer NFT marketplace in the world. NFT games, music, and other works of art can be found there. The fact that ERC-1155 and ERC-721 tokens are supported on the OpenSea platform is intriguing, to say the least. For games or digital collections, creators can even create smart contracts.
But, please note that at OpenSea, you can only pay with cryptocurrency. Because the platform does not allow fiat currencies, such as Euros and Dollars, users are unable to make payments with them.
Then, we must mention Rarible. It is one of Ethereum's most popular NFT markets and is a community-owned site that shows various digital artworks and collectible things. You can buy and sell any type of artwork exhibited on the marketplace, just like you do on OpenSea. Sellers can also make multiple NFTs for the same piece of artwork and sell it multiple times. Rarible's UI is straightforward and simple to use for newcomers to the NFT marketplace. Users who have tried to transact on a similar NFT platform like OpenSea will find it simple to learn. Various crypto wallets, such as MetaMask, Coinbase Wallet, or any mobile wallet that implements WalletConnect, can be used to purchase and sell NFTs using Rarible.
Finally, Foundation is a well-known marketplace that sells a variety of popular NFTs. This platform proudly displays NFTs of Nyan Cat, an internet joke, to name a notable NFTs. However, because Foundation is an invite-only marketplace, artists must have a strong network to get invited. Because of this restriction, the market may miss out on some excellent talent.
Of course, these are not the only existing marketplaces for NFTs out there, even Binance has its platform named Binance NFT. But, regardless of the growth of this sector, their long-term implications can be foreseen.
A brief summary of the most valuable NFTs sold in 2021 and 2022
Perfect, now you know how to buy NFT and that there are plenty of options to sell or buy them. But how expensive can it be? To answer this, let's take a look at the most valuable NFTs sold in 2021 and 2022.
Several new artworks by CryptoPunks and Beeple were among the most expensive NFT works in 2021, according to the pricing list. A record sale of Beeple's Everydays—The First 5000 Days was one of the year's major events, demonstrating that the market is ready for this type of new work and isn't holding back when it comes to significant purchases. When we compare sale prices from earlier years to the current one, we can see how much profit is made in a short period of time through NFTs. For example, XCOPY's NFT A Coin For the Ferryman sold for USD 6 million in November, although it was just USD 139 or 0.5 ETH when it was released in 2018.
An image of Edward Snowden's face produced from pages of the court's ruling has transformed into an NFT titled Stay Free that sold for USD 5.4 million (2,224 ETH) in April 2021, making it one of the most expensive NFTs of 2021.
Mike Winkelmann, alias Beeple, is a graphic designer and NFT artist who shot to prominence last year after one of his NFTs sold for USD 69 million. Ocean Front, his other sculpture, sold for USD 6 million in March, making him one of the most successful NFT artists on the market. The list still goes on, but these were some of the most representative cases. Just in case you would like to know more success stories with NFTs you could check websites like CoinMarketCap.
Disclaimer: The information contained in this article is for informational purposes only and does not constitute financial advice or recommendations. Investing in financial products or cryptocurrencies involves risks, and you should be aware of the potential risks involved before investing. The content on this website is not intended to be a solicitation or offer to buy or sell any financial products or services. The information provided does not take into account your specific investment objectives, financial situation, or needs, and should not be relied upon as a substitute for professional financial advice. You should seek independent advice from a financial advisor or other professionals before making any investment decisions. Please be aware that the legal status of cryptocurrencies and other financial products may vary in different jurisdictions and may be subject to regulation. It is your responsibility to ensure compliance with any relevant laws and regulations governing the sale and marketing of financial products and services in your jurisdiction.
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