An overview of NFTs

Table of Contents: ‍

1. History
2. Art
3. Digital Art
4. Blockchain
5. Democratization of Investing
6. NFT Companies/Marketplaces
7. Famous NFTs
8. Influencers
9. Conclusion


An overview of NFTs

 

NFTs, also referred to as “non-fungible tokens” are digital assets that are held under the blockchain technology. While they are pretty new and unfamiliar to most individuals, they will redefine the way in which people perceive art, and digital collectibles. These tokens have gained popularity among the crypto community, as they are a new form of asset class that can easily be held by multiple owners compared to traditional art. 

NFTs can be registered under songs, digital art pieces, images, digital cards, pretty much anything digital. Their ownership is mainly verified through the blockchain technology, allowing individuals to trade freely with one another in a safe manner. 

The recent pandemic has changed the way in which individuals interact and has changed the way in which we consume art. Collectibles are likely to take a digital form in the future and won’t necessarily be as prevalent in physical form. 

There is no doubt that physical goods will remain prevalent in our current landscape, but a new form of art has now emerged. 

Like the way we used to consume music, individuals are now much more likely to find music on the internet. 

We could notice this phenomenon through emerging artists, who have now decided to promote their music mainly on social media. This phenomenon can also be observed for digital artists, who expressed their art by publishing edited images or videos, to the public. 

This new form of art is mainly promoted on social media, giving individuals the ability to express themselves to the public. 

On the other hand, we cannot consider that NFTs are currently fully democratized as a large majority of the population does not understand their value, or what they could provide to the public. 

This seems logical and comprehensible, as people new to the industry must first understand the value brought by the blockchain technology to fully appreciate digital collectibles. 

A digital image, video, or music could in fact be copied multiple times and wouldn’t necessarily be worth anything.

 However, NFTs were created in a way that ownership could be certified, thus making it impossible for individuals to fully copy the file. 

As an example, it would be possible to have a copy of Mona Lisa as a collectible, but this would not in any way certify the originality of the art piece. 

Indeed, there is only one original copy, and this art piece and the presented copies would not hold any essential value. 


History

 

Previously called colored coins, NFTs gained considerable attention in the early days of Bitcoin as a means of releasing additional kinds of assets on top of the blockchain. 

The idea was that these colored coins, which were essentially Bitcoins used to symbolize something else, could be used to enable users to issue everything from business shares to video game in-game goods. This idea of releasing new assets in addition to the Bitcoin network captivated many Bitcoin users, including future Ethereum enthusiasts. 

The “colored currency”, however, did not garner much momentum. The most famous colored currency ever created may have been the Mycelium Bitcoin wallet, used through the Colu colored coins protocol.

On May 3rd, 2014, the history of NFTs and the guy who invented them, Kevin McCoy, started. He created his non-fungible coin "Quantum" before the crypto art market took off.

McCoy is a one-of-a-kind character. He and his wife Jennifer have made a name for themselves as top-tier digital painters throughout the years. Rather than engaging in public bidding wars, McCoy prefers to sell their work via galleries or one-on-one. 

The Metropolitan Museum of Art now has their piece "Every Shot, Every Episode" on exhibit.

 

Art

 

Art is something that everyone enjoys. Starting from music to collectibles, art is what defines a country’s culture, perspective, way of life, and even philosophy.  

Indeed, the only way for individuals to express themselves freely and to the best of their ability is done through art.

Since the creation of mankind, people have been painting, drawing, producing music, and sharing ideas and thoughts through those activities.

This way of living will never stop and will continue for years to come. Nowadays, society faces a different set of problems and expectations, but the taste for art is even greater than in the past. Music, theater, concerts, events, are constantly happening for people to enjoy and consume art.

To see an original piece of art, one individual must be able to go to a specific place. We have seen through the past pandemic that it could be even more difficult for some individuals to consume art when venues are closed. 

This raises a constant issue, as freedom of movement is essential for individuals to be able to enjoy historical collectibles. 

 In addition, we must consider that physical collectibles are difficult to store, and therefore costly to maintain. 

This problem makes art difficult to consume for most people to this day, as maintenance costs are high. It is now hard for the everyday person to go to an art gallery, and to have the opportunity to appreciate collectibles. This situation could be solved by technology, assuming that people are widely interested in art. 

Sitting at the forefront of innovation, entrepreneurs have been searching for ways to effectively make art readily available to all individuals. 

There are however many technical questions related to this issue:

What would be the way to store art digitally? 

How could we ensure the authenticity of a collectible?

What tools would be necessary to help artists to promote their work? 

Would people be interested in digital collectibles?

Such questions should be raised; going from a physical fort of art to a digital form implies many changes that will need the consumer’s approval. 

This unavailability of art validated the need for accurate solutions to be proposed for years to come. History tells us that individuals would appreciate being able to hold and see collectibles, at will.  

As an example, music used to be quite difficult to get before the internet era, as individuals needed to visit a store, buy a CD, and play it on a disc-player. 

Such problems were identified and quickly solved by entrepreneurs, who envisioned music being consumed on the internet, widely available to all individuals, and at a much cheaper rate than in the past.

 

Digital Collectibles

 

Looking at the issues presented by physical art, we can notice that digital art would be a great way to democratize the access of collectible art to all individuals. Digital art would be readily available on the internet, and most individuals do have access to a computer these days.  

Another aspect to be considered would be that digital collectibles are not perishable, and therefore much easier to maintain, while having lower associated costs. Physical collectibles cost a lot of money to be maintained and are perishable overtime. 

Even the best paintings will be damaged overtime. This situation also raises a security question, as very expensive collectibles require constant surveillance to ensure that they could be kept intact by the organization holding the asset. 

All these costs could be offset by technological advancement. Thanks to blockchain technology, digital art forms can be safely stored on the internet, with lower maintenance costs. 

To learn more about collectibles, check out this replay of a PBWS 2020 panel, Collectibles and NFTs: the Future of Gaming - brought to you by Nomadic Labs.

Blockchain

 

Although blockchain seems to be complex, as it can be, its fundamental idea is really very simple. A database, or blockchain, is a kind of digital ledger. To comprehend blockchain, it is necessary to first comprehend what a database is.

The way data is organized differs significantly between a traditional database and a blockchain. A blockchain is a digital ledger that organizes data into groups called blocks, each of which contains a collection of data. 

Blocks have specific storage capacity, and when they are full, they are linked onto the preceding block, creating a data chain known as a "blockchain." All additional information added after that recently added block is assembled into a new block, which is then added towards the chain after it is full. 

A database organizes information into tables, while a blockchain organizes information into pieces (blocks) that are linked together. All blockchains are considered data as a result, but not all records are blockchains. 

When applied in a decentralized manner, this technology creates an irreversible data timeline. When a block is filled, it becomes permanent and part of the chronology. When a block is added to the network, it is assigned an accurate timestamp.

The blockchain technology revolutionizes the way in which we view ownership. To prove ownership in the past, individuals had to be able to provide a document that would certify their ownership of a collectible. 

By having the document, they could indeed prove ownership. However, if such a certificate had to be lost, there would not be any other way to prove ownership. 

In essence, the blockchain technology now certifies ownership through smart contracts, digitally imprinting and certifying the ownership of a digital collectible.

This information is then stored on the technology itself, enabling users, vendors, and individuals to be always aware of the ownership of the collectible. 

Validity of ownership makes it also easier for individuals to trade and transfer digital goods, allowing free trade at the best of its ability. 

Blockchain doesn't save any of its data in a single place. Instead, a group of computers copies and spreads the blockchain. Every computer connected adjusts its blockchain to match the addition of a new block to the blockchain.

Blockchain makes it harder to tamper with data by disseminating it throughout a network rather than keeping it in a single central database. If a hacker obtained an identical copy of the ledger, just a single replica would be compromised, rather than the whole network.

Digital goods therefore allow emerging artists to be able to create a collectible in a no-time and certified their ownership to the public. Thanks to the technology, there are also no security concerns for the end user. 

Once a trade is made, people can successfully transfer ownership through smart contracts. This reinforces the idea that the blockchain technology is available to all individuals and changes the ways in which ownership operates. 

This technology is not solely applicable to NFTs, but many other areas. Industries like health, sports, finance, all have a need to share and store information and must be able to successfully store that information. To learn about how blockchain is changing payments, read our recap of the PBWS 2019 panel: Blockchain: the Future of Payments.

Nowadays, information is abundant and accessible to all individuals. Having a computer with a basic internet connection is enough for people to get access to data; long are the days where people had to wait for investing reports or had to go to the library to get extensive information.

In this new system, power is given back into the hands of people. This supply of information makes investing accessible to the everyday person.


Democratization of Investing

What makes investing and NFTs so special has to do with communities. In this digital era, individuals build and form communities to share ideas, and investing tips about their passion. This new phenomenon builds and brings value for the consumer, without a specific need for enterprise. 

With this concept emerged the democratization of investing, where all investors (amateurs and professionals) have abundant access to information. Such opportunity makes it possible for amateur investors to rely on their community to make investment decisions, and to collectively own an NFT. Decades ago, a collectible could only be held by a single individual. With a strengthened sense of community, it is now much easier for individuals to gain access to collectibles.


NFT Companies/Marketplace

 

As this new landscape needs innovation, many companies have decided to focus solely on NFTs as many problems need to be solved within the industry. For example, marketplaces must be set in place to successfully allow individuals to trade this new form of art. A great example would include OpenSea, a New-York based NFT marketplace allowing individuals to trade NFTs.

 

1- OpenSea

Founded in 2017, users can buy and sell blockchain based NFTs. In addition, this startup is especially great for digital artists, winning a royalty everytime the asset is exchanged between users. OpenSea is currently one of the biggest NFTs companies, proving that the surge of demand for digital art is indeed factual.

 

2- Rarible

Rarible is an NFT marketplace located in Los Angeles that divides its NFTs into categories such as art, photography, music, domains, DeFi, games, and Metaverses. Non-fungible tokens may be bought, sold, and created here. In the year 2020, the marketplace was established. 

On the site, we can also find the best-selling NFTs and the hottest collections. This allows visitors to see what's going on in the marketplace. Rarible does have a large number of celebrity NFTs. Upon exchange, a 10 percent royalty fee is charged. Authentic and committed collectors and producers get certified badges from the site. To be validated, users must fill out a form. It is also possible to use OpenSea to organize and see Rarible collections.

 

3- Axie Marketplace

The second-largest NFT marketplace is hosted by the NFT-powered video game Axie Infinity, which has a total trade volume of more than $2.1 billion on Dappradar. It only deals in Axies, which are adorable Pokémon-style digital creatures that users can purchase and sell on the Axie Marketplace. 

It is possible to use the game's built-in breeding mechanisms to produce new Axies, which can be sold on the Marketplace. Unlike art NFTs, which are gathered for the sake of collecting, Axie Infinity's NFTs have a purpose: they may be used in-game to fight monsters and other players, earning tokens that can be used to create new species. Axie Infinity's NFTs have proved to be so profitable that some players in the Philippines and Indonesia make a career breeding and selling them.

 

4- Super Farm

SuperFarm can be defined as a cross-chain protocol that aims to shake up the NFT market by allowing gamers to farm NFT tokens. It is indeed similar to a token farming feature seen in several DeFi systems. SuperFarm, which debuted in late March on the newly renamed Polygon (previously Matic Network) platform, started off to a great start with a five-day Genesis Drop Event. Participants may be able to win NFT tokens, which will provide them unique advantages on the site in the future. 

Users may anticipate additional features in the coming months when the beta & full release variants are pushed out, such as video game interfaces and NFT-based voting, renting, and loans. 

 

5- Eternity

In February, Ethernity announced its intention to create its exclusive marketplace for verified NFTs. 

Ethernity has concluded a seed round and a public token offering on Polkastarter since its February launch, as well as announced agreements and cooperation with NFT portal Terra Virtua and Hong Kong investment firm Kenetic. 

Nick Rose Ntertsas, a longtime Bitcoin investor who has been engaged in crypto since 2011, is the brains behind the initiative. He's renowned for his charitable efforts as well as his investments in different blockchain startups. The Ethernity platform will be available on April 12th. To commemorate the launch, Ethernity has partnered with visual artist Jason Heuser to provide an unique NFT drop to Ethernity ERN unit holders.

 

Famous NFTs

 

1-  Mike Beple - Everydays : the first 5000 days – $69.3 million

Known professionally as "Beeple," Mike Winkelmann is a well-known digital artist who has recently made headlines for selling one of his NFT collections for an absurd sum of $ 69 million, according to his website. As a result, he may be considered a significant participant in the NFT industry.  

Beeple is not an expert in ETH, or cryptocurrencies in general, as he has acknowledged in his previous statement. Like his colleagues, he began his professional life as someone who was a big lover of art, particularly digital art. This was the foundation of his work. He spent the most of his early years developing his skill as a digital hobbyist, and he became well-known in the digital art world for his participation in the "daily movement," which includes assembling a collection of photographs shot every day for a specified number of years. 

As a result, his perspective as a digital artist is particularly intriguing, and we could eventually consider him to be an outsider in the blockchain world.

 

2-  CryptoPunk #3100 – $7.58 Million

CryptoPunks is a brand-new kind of NFT creation. Because these are the first NFTs to hit the market, and following the NFT boom, many of them are now selling for millions! That's why CryptoPunk #3100, the second most valuable NFT ever sold, is also on our list. 

In actuality, this CryptoPunk is a one-of-a-kind creature that belongs to a group of nine aliens. CryptoPunks, you see, has only 10,000 punks in stock. Furthermore, just 9 of them are aliens. As you can see, these nine are among their most valuable collections. These coins are also ERC-20 tokens, which means they adhere to ERC guidelines. 

The character comes with a blue-greenish skin tone and an accessory. It's a headband in this instance, but only 406 punks have such a item. Even more so since this only comes with one attachment, which is equally uncommon, and only 333 punks have one. This punk is very uncommon, depending on the kind, accoutrements, and accessory numbers. Because of this, it was sold for $7.58 million.

 

3-  CryptoPunk #7804 – $7.57 Million

This other CryptoPunk made the final cut with a total of $7.57 million. The Punk #7804 is yet another Alien, and this time it comes with three attachments, which is a first. 

Cap Forward, Small Shades, and a Pipe are just a few of the extras available. Cap Forward is claimed to be worn by just 254 punks, Pipe is worn by 378 punks, and small sunglasses are worn by 317 punks. 

The price, on the other hand, is predicated on the assumption that Alien punks seem to be extremely rare. During the company's initial rollout of the 10,000 CryptoPunks, Dylan Field would be the one responsible for bringing the punk back into the fold. 

In truth, he is the creator of Figma, a technical design business based in San Francisco. Why did he spend so much money on that jerk? The potential of this Ethereum-based NFT was identified by him, and this led to his purchase of the asset in 2018.

 

Influencers

 

1-  Beeple - @beeple

When he created a collage of 5,000 ordinary artists for Christie's this year, the artist known as Beeple became the first digital creative to offer an NFT-supported piece via a major auction house. Justin Bieber, One Direction, and Katy Perry are among the musicians for whom he has developed concert graphics. And has produced and released one 3D picture every day for the last 10 years.

 

2-  Grimes - @Grimezsz

Earlier this year, the Canadian singer sold NFT paintings for $6 million. Grimes, Elon Musk's girlfriend, sold her WarNymph collection of digital art on the NFT platform Nifty Gateway in less than 20 minutes. While concerns regarding Grimes' work and its value circulated, many members of the general public were left wondering what NFT art is and how it is valued.


3- Fewocious - @fewocious

Fans have dubbed an 18-year-old painter known as "Fewo" as one of the brightest emerging stars of a new digital art trend fueled by NFT innovation. Fewocious is just eighteen years old. While most adolescents dream of getting a new iPhone for their 18th birthday, the self-taught artist made $370,000 with one NFT drop of surrealist art. 

He's currently collaborating with RTFKT on a project to pair NFT art with designer clothes. In addition to genuine shoes and other apparel products, his Fewo World drop earned more than $3 million in seconds.

 

4- Mark Cuban - @mcuban

Mark Cuban is well-known for his business acumen. Broadcast.com, his business, was sold to Yahoo! in 1999 for $5.7 billion in Yahoo shares. He is now well-known for his role as one of the sharks on ABC's Shark Tank. Cuban recently said that if he were to establish a company today, he would do it on the blockchain and in the NFT sector. 

That's the sort of endorsement that gets people's attention when it comes from Mark Cuban. Mark Cuban's engagement in the confluence of digital art and non-fungible tokens is expanding (NFTs). 

The wealthy Shark Tank star and Dallas Mavericks owner revealed to The Block that he is constructing a new digital art and collectibles exhibition. In the growing market, this is the most recent product introduction. According to Cuban, the website is up and running, with tens of thousands of visits in its first few days.

 

5- Duncan and Griffin Cock Foster - @DCCockFoster - @gcockfoster

 

One of the most popular NFT platforms is Nifty Gateway. This service was developed by Duncan and Griffin Cock Foster to enable ordinary people to pay for digital art using a credit card. 

Since private wallets go down after a year, there's no incentive to move Ether to one. The latest version of the site has become a go-to spot for the world's best digital artists. To celebrate the sale of the platform to Gemini, the twins hosted a dinner party during which they distributed limited edition NFT artworks.

 

Conclusion

In conclusion, NFTs are here to stay and will be a new way in which people consume art. Ranging in collectibles from various industries such as art, sports, gaming, fashion, and even virtual real estate, The technology allows users to successfully store their digital goods onto the blockchain.  

This form of asset class has the potential to revolutionize the way in which digital collectible will be sold all around the world. Even if the industry is still in its infancy, there already are many signs showing that this is a booming industry. While gaining endorsement from top influencers like Garyvee, Jay-Z, or even Paris Hilton, this form of asset-class is on the right path and here to stay! 

As digital collectibles become more and more available to the everyday person, people will be able to hold art in their mobile phone, computer, or any other digital device.  

Join PBWS now to learn more about new NFTs, meet and learn from the greatest industry players and get a chance to drop some NFTs!


Tickets are available now
Come Join Us to #BuildTheNextWeb

PBWSummit will gather the most prominent blockchain and digital asset organisations from all around the world for two days of insightful talks in Paris!

get tickets