From 8-bit Cryptopunks to cartoon Apes, NFT-mania has taken every blockchain ecosystem by storm. On the surface, NFTs look like plain jpg images, but why are people paying up to $69 million dollars for them? And are they just a phase or does the technology actually have value? In this article, we discuss all the above and more, so stick around!
What are NFTs?
NFTs stand for Non-Fungible Tokens, but what does that mean? Put simply, Non-Fungibility means the token is unique and cannot be traded or replaced with another one of its kind. For example, there are many Golden Retriever dogs in the world, but no two of them are the ‘same’ and so can’t be replaced with one another — just like NFTs.
Currently, most NFTs are images, but anything that exists on the blockchain can be turned into an NFT — we’ll get into that in a bit.
How Did NFTs Come About?
The first NFT ever was released on May 3rd, 2014, but the concept really only took off with the introduction of Cryptokitties in 2017. Cryptokitties was the first “blockchain game” and involved players purchasing virtual NFT kittens which they could collect, breed, and sell — all on the Ethereum blockchain. Cryptokitties was a novel concept and kickstarted the craze around NFTs, with one of the kitten’s selling for over $170K in 2017.
It’s not far off to say that Cryptokitties single-handedly pioneered the #Play2Earn model, a concept we’ll discuss in the upcoming sections.
To recap, NFTs are unique tokens that can exist in many forms (art or in-game collectibles). But what’s the biggest advantage of the technology? There are two: proof of ownership and transferability of the NFT over the blockchain. Unlike other media forms, NFT ownership is verifiable by the it’s hash number, which is a unique ID assigned to the NFT and links directly back to the purchaser’s wallet. This solves the $328 billion problem of counterfeiting and duplicating plaguing art and media industries. Second, the NFT can be transferred via the blockchain to anyone worldwide — much easier than how traditional art pieces/collectibles are transferred between owners.
Alternative NFT Use-Cases
While the NFT ecosystem is still young, one fact remains the same: NFTs can exist in many forms. Below, we’ll explore how NFTs can be used to prove the authenticity of different types of goods — from real estate to music!
NFTs in Music
A big issue for musicians is how unfairly they get compensated for their work. From restrictive label contracts to low-paying streaming services, artists need to rely on touring to continue pursuing their passion. By turning music files into NFTs and releasing it to the general public, artists can bypass all the middle-men who take a cut of their hard-earned profit.
Artists can even customize the NFT smart contract to ensure that both themselves, and the fans who bought the music, get paid royalties perpetually. Imagine getting paid to own your favorite artist’s biggest song!
NFTs in Real Estate
Since NFTs are a bullet-proof way to prove ownership, they can be linked to real world assets to digitize physical items like land. For example, in real estate, we deal with property deeds that need multiple signatures and third-party verifications to prove ownership. Instead, creating a NFT that represents the deed makes tracing and transferring ownership of illiquid assets extremely simple. While still in development, this use-case is one to watch for the future.
NFTs in Social Media
If the Facebook outage proved anything it was how dangerous centralization can be for content creators and influencers. Not only do creators have to deal with not getting paid by the platform that they benefit, they also have to think about what they’ll do in situations like the Facebook outage! For example, by creating video, audio, and other media-based NFTs and selling them on decentralized social media platforms like Only1, creators can finally get compensated fairly for the time and effort they put into creating valuable content.
NFTs in Gaming
We touched upon games like Cryptokitties and Axie Infinity, but both projects are just the tip of the iceberg of blockchain gaming. As the metaverse evolves, we’re bound to see more complex NFT-tied blockchain games to lead the way. And we’re already seeing this happen with complex, expansive games that launched on Apollo-X like Star Atlas. Players can create custom characters by buying NFTs or earn rare NFT items like clothing, weapons, and traits by simply playing the game — which players can later sell in the game’s marketplace. What’s more, these NFT-tied games further develop the #Play2Earn model, which pays players to play the game!
No more pay to win, it’s time to play to earn.
The Future of NFTs & the PAID Ecosystem
At PAID, we pride ourselves in our conviction in technology that we believe is going to be a game-changer in the future. We sense the same with NFTs and have supported a tonne of NFT projects since the technology picked up steam! We’re also bullish on NFTs tokenizing traditional contracts like those in real estate and logistics. This is why our PAID Dapp could potentially have all our business agreements embedded and signed on the blockchain with NFTs acting as the mechanism behind the proof of signature and authenticity!
NFTs are just getting started, strap along with PAID to realize how it could become the core of the metaverse!
PAID Network seeks to redefine the current business contract, litigation, and settlement processes by providing a simple, attorney-free, and cost-friendly DApp for users and businesses to ensure they #GetPAID wherever they are in the world.
PAID technology leverages Plasm to operate on both Ethereum and Polkadot ecosystems. PAID makes businesses exponentially more efficient by building SMART Agreements through smart contracts in order to execute DeFi transactions and business agreements seamlessly.
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