What distinguishes NFT? First of all, as we described in the previous blog, NFT is a unique digital element owned only by its owner. This particular NFT is stored on the blockchain throughout its history; Once on it, it is not possible to copy or manipulate NFT, but it is still possible to exchange
Indivisible: Also, NFT cannot be broken down into smaller parts, only the option to purchase the entire NFT.
Basically these NFTs are in small sets together however to maintain originality many NFTs are not found in the same set.
History of the NFT
The first NFT form was released in 2012, with the aim of increasing the functionality of Bitcoin by offering tokens that were representative of the percentage of ownership in the blockchain.
- The second important step was the creation of Counterparty in 2014, which is a P2P financial platform (open source) built on the Bitcoin platform, on which digital property can be exchanged.
The NFT boom in 2017 was followed by the release of CryptoPunk on the Ethereum blockchain. CryptoPunk is a variety of characters (10,000 pieces in total) that you can buy freely after you create them. Today the cheapest of them cost about half a million dollars, the most expensive 7 million.
-At this time in 2017, a new set of NFTs became popular (Cryptokitties); This is a game where you can pick up, multiply and exchange kittens.
Top NFT Markets
The NFT market is becoming more and more popular, namely, 2.5 billion accumulated in sales in the first quarter of 2021.
Digital art collectibles, game elements, videos and similar variables are sold in the markets.
NFTs and their use
NFTs are used in industries such as: Art, Fashion, Gaming, Insurance, Finance, Real Estate
- Art: Market for digital drawings
NFTs allow owners to attach a digital work of art to a certificate of ownership. Gradually this field became so popular that JPEG form property was sold in March (2021) for $ 69 million.
- Music: A new source of income for musicians
NFT can be attached to a song or album by creating a digital version. It naturally offers musicians an additional pseudo-medium to generate passive income. For example, one group received $ 2 million in sales using NFTs (Kings of Leon).
- Gaming: A very popular industry for NFTs
You can see different types of games on the blockchain, for example Cryptokitties which I mentioned. Among them the most popular Pokemon-like is Axie Infinity. You need at least 3 axies (or small creatures) to start the game. Each of them has special powers and qualities. You can collect and increase them as well as fight or exchange with each other. During the game you collect tokens that you can sell in the future. Axie has about one hundred thousand active wallets registered.
NFTs are also used in typical games; Several companies allow players to purchase certain skins in the form of NFT. NFTs in this field can completely change the situation and in the future it will not be surprising to see AAA games coming out that are built on NFTs.
- Fashion: Use NFTs for transparency and traceability to build a more trusting relationship between you and your customers
In vogue, NFTs are used as a source of information. Determining the accuracy of supply lines is possible at the expense of precisely marked data. Companies offer consumers digital passports as soon as they purchase a product. These passports are certificates of authenticity & ownership. Such an element allows the company to have a more specific relationship with each buyer than was previously possible.
Risks of NFT
Philosophical / ethical components of different markets are becoming more and more topical issues, we have offered both an introduction to this field as well as some principles that can guide you throughout the project.
You will not be surprised that this popularity is accompanied by the proliferation of scammers. "Evolved ape", a collection of 10,000 digital primates (which sold for $ 2.7 million) is the clearest example of this. The creator disappeared as soon as he received the money.
There are also problems with the environment. Specifically, NFTs emit too much carbon per cut (specifically, 210 kilograms are emitted over the entire cycle, which is equivalent to traveling more than 800 kilometers by car). This aspect of the NFT is crucial given that we are dealing with a climate disaster.
A market full of opportunities
There are many uses for NFT already and there is no doubt that it will continue to grow and take root in various fields. There are many ways to commercialize NFT but it is accompanied by serious problems that make it even more dangerous to use them than allowed.