A variety of different research firms, such as L’Atelier BNP Paribas and NonFungible.com, examined the NFT market and discovered that throughout 2020, NFTs controlled a 250 million dollar market, with rises in investments by up to 299% year to year.

Naturally, since the market for such items is growing quickly and can be quite a profitable source of income, many investors seek to cash in on the craze and make a lot of money. 

Perhaps part of the reason why the craze has taken off is the benefits of NFTs.

For artists, NFTs bring freedom of expression. Since they don’t follow the same conventions as canvas art, it can be attractive for artists to create their work digitally.

Both investor and creator alike are drawn to the lack of a middleman or a gallery, where no money is lost to the person working in-between the two.

For many, it’s also an alternative kind of investment, with many diverse items available. The game rules are far different from the conventional way of doing things.

Fungible means any unit which can be exchanged, such as money.

$10 notes can be seen as the equivalent of two $5 notes or five $2 notes. In terms of our everyday terms, a non-fungible item could not be exchanged for something of a similar value.

Everyone would agree that the Mona Lisa is priceless. The house you live in is unique and different from all the other houses. Your furniture, computer, and a rare and unique Pokemon card are non-fungible assets. 

Originally just a fringe activity, NFTs have catapulted into mainstream cryptocurrency activities as just another playground for those with significant money.

These tokens can be traded digitally as a collectible digital asset through the blockchain network. They are all one-of-a-kind, unique items owned by individuals on an incorruptible database.

Popular among artists and art collectors, gamers, and big business brands, NFTs can be anything from artwork to memes, video game skins or characters, videos, social media posts, trading cards, or GIFs. The possibilities and the scope are endless. 

It gives new meaning and purpose to those who create incredible digital works of art and opens a lot of potential for both artists and investors alike. The cost is just as high for many of these items as any other artwork in a gallery or a museum.

So, as we continue, we will delve more into the world of non-fungible tokens and explore exactly what makes these digital items so very valuable. 

The Emerging Trust economy

When considered socially, trust has a variety of different meanings and connotations.

Trust will normally refer to situations that are characterized by two different aspects. First, one party trusts the other party. They are prepared to rely on their actions and believe they will do as they say. The second is when the situation is directed towards meeting a certain objective.

Even without delving into all the controversies surrounding the world of cryptocurrency, part of the most promising deliverables of the economic system is the entirely brand-new sense of trust that it offers to people.

Societies of our day and age operate based on trust in the systems we have throughout the government and economic processes, be it state power, judiciary processes, or money. As time has progressed, new types of trust developed in different systems, which has led to more decentralized models, offering much more security, transparency, and efficiency in managing the trust.

This means opening the internet.

The idea of the open internet is incredibly powerful. In some ways, NFTs place a limit and a scarcity on items that typically are not lacking in circulation.

There’s some opposition to the reasoning why people would want to make something more scarce and more difficult to find if people want it. Nobel Prize-winning economist, Elinor Ostrom, suggests that the ways communities manage resources with or without governments and that overconsumption hurts the entirety of society has something to do with it.

What is value?

There are two main definitions of the meaning of value.

First and foremost, value is a principle or standard, as of behavior, that is important or desirable. Secondly, value rates or evaluates something according to a relative estimate of worth or desirability. 

In economics especially, an object or service’s value is typically defined as the price that it would bring on an open, fair, and competitive marketplace.

The marketplace price determination is identified based on the object’s relative supply and demand in society.

How to Assess the Value of an NFT?

The value of a non-fungible token is based on three different variables. These are known as the subjective quotient, utility, and provenance.

1. Subjective Quotient

Often, the value is defined based on either the subjective or objective value of an item.

An objective value is where someone’s belief, perception, or preference doesn’t impact the real importance.

Objectively, the value remains the value, no matter what you say or do.

The objective theory of value, in contrast to both the above, holds that the good is,

“…neither an attribute of “things in themselves” nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value…The objective theory holds that the good is an aspect of reality in relation to man—and that it must be discovered, not invented, by man.”

Peikoff, Leonard. Objectivism: The Philosophy of Ayn Rand, p.242

In contrast, subjective value can change and be altered based on the whims of the individual.

Subjective is the idea that an item’s value depends entirely on that person’s beliefs, preferences, choices, or ideas.

For example, a person attending a soccer game might spend thousands of dollars for premium seats because they are huge soccer fans, and it has incredible value.

For those who are not soccer fans, thousands of dollars on a premium seat are a huge waste of money and worthless for us.

A vintage car lover may be willing to spend millions of dollars to own a vintage car and many more dollars in upkeep. This, however, is very uninteresting to anyone who views cars to get from A to B.

The purchase of an ultra-rare Pokemon card, while meaningless for most of the population, is a literal goldmine for certain buyers.

Across any marketplace, whether online or in your local town, all objects and commodities are assigned a value based on the target consumer, their likes, and their desires.

It is based on them subjectively. Some who enter an art gallery will be impressed by certain art pieces and place subjective value on them. Some of those who enter won’t consider the same.

This is the same with NFT art and items.

The $69 million-dollar Beeple’s sale at Christie’s is one of the costliest non-fungible token sales that has ever taken place in NFT’s short history. The artwork sold, “Every day’s – The First 5000 Days,” was able to find a customer who understood and perceived the subjective cost of such incredible work.

The customer understood the piece was worth a whopping 69 million dollars and was willing to pay.

Therefore, this subjectivity of the customer and the subjective quotient are foundational to defining the actual value that an NFT holds. One man’s trash is another man’s treasure.

2. Provenance

Another issue that is regularly raised regarding NFTs is that of provenance.

Most NFTs exist digitally and online, which makes it quite difficult in some respects compared to something such as a house.

While some NFTs can be used to show ownership of physical objects, now, in the digital world, some consumers are showing the value of owning original and valuable digital media and objects upon validating their provenance.

So, what exactly is provenance?

Provenance is the history of a valued object or work’s ownership over its history.

Provenance is important since it can conclusively prove just how authentic a work of art is and, therefore, can greatly increase its value.

In history, provenance was viewed as the best methodology for verifying just how authentic an item was.

Provenance has always been a valuable tool in the marketplace for expensive items and is applicable in art, luxury, and collectibles markets.

Likewise, the same process can be applied to NFTs.

In the NFT world, the value of an object, artwork, or collectible is directly linked to who the owner is or who initiated it, an individual artist, a major luxury brand, or a major sporting brand.

Non-fungible tokens that have a significant ownership value are normally those which were created or issued by world-famous artists or worldwide companies that maintain a strong brand.

For example, luxury fashion such as Burberry and Louis Vuitton seeks to work in NFTs and gaming to further promote their luxury brands, capitalizing on the worldwide interest in digital art and NFTs. 

Those observing the current trend in NFTs can see three things happening.

Firstly, many artists cooperate with big brand companies worldwide to create and issue NFT artworks.

Secondly, some very influential people have created entirely new wealth classes through NFTs.

Thirdly, mass resells of non-fungible tokens previously owned by influential people have occurred. 

Thanks to the incredible blockchain technology, the provenance of all these digital items, the brands, and the influential people they came from can be accurately traced and tracked, with platforms such as Opensea, Raible, and others seeking to develop into this scene. 

The blockchain certificate that comes with digital items on the blockchain technology guarantees their provenance, previous ownership, and total authenticity as a sellable items.

Because of the way it is added to the blockchain, this blockchain certificate can be viewed by almost everyone, but there is no ability to change or alter the certificate.

It can be distributed without losing ownership of a design or an artwork, and its value is assured. 

3. Utility

The utility value of an NFT is wholly dependent on how the NFT can be used.

Gaming platforms, systems, and items are one of the more practical and real-world examples of utility in NFT form.

Across the NFT market, there are many ways that NFTs can be applied, from gaming to digital property ownership to ownership of avatars and the like. The options are endless, and many developers will capitalize on as many ways as possible to produce income for their companies.

Games form many different NFTs that can be used by players within games. These could be swords to fight an enemy, skins to change the look of their character, art, or furniture to decorate their homes or fashion for their person.

Whatever the purpose, being able to make and use items such as these in a game creates value across the entire game.

Players can use whatever valuable assets they want and sell them off to other players if they wish.

With purchases, game creators can make more items, improve the game, pay their people, and program a contract into the NFTs that grants a small commission on future buys. In addition to the normal and traditional methodology of in-app purchases, non-fungible tokens provide a whole new avenue for developers to earn more income.

Another such dimension of the utility of an NFT is the ability to see or use the NFT in any context or application.

This means it is independent of the ecosystem where it was purchased and can be operated anywhere by nature.

Some developers will do partnerships to provide such utility for developers.

For example, Dapper Labs can cooperate with non-fungible token event organizers to create a discount for owners of CryptoKitties. By forming technologies such as AlphaWallet’s tokenScript, cooperation is very efficient, and the issuer of the owner of NFTs can be easily authenticated.

In this way, those who organize events don’t need to do much to partner with other organizations. It’s a simple, easy, win-win process for those companies seeking to work together.

Examples

• Genies, a virtual identity platform, recently decided to host a large fundraiser to create digital avatars and wearable goods.
• The largest game on Ethereum, Axie Infinity, is modeled as a Pokemon-Esque monster collecting game, where players battle and breed for glory and profit. All these NFT items can be traded and sold. In addition to this, it is also one of Ethereum’s most used applications.
• Yet another game on the Ethereum ecosystem is Gods Unchained, a trading card game similar to the game Magic: The Gathering. In Gods Unchained, those who play form decks of cards of different fantasy beings and battle them with others. The winner takes renowned and tokenized prizes on the blockchain network.
• As many people know, virtual reality has been a reality for several years now. Ethereum is the first technology that truly allows virtual reality projects to make their real estate items scarce and easily tradable around the world. For all these reasons, the virtual reality projects lead to a new sort of internet, defined by virtual worlds, called a metaverse.
• An example of one such virtual reality system is that of Cryptovoxels. This project on Ethereum has formed its name through taking good care of its development team and creating an enjoyable system for users. Within this virtual reality project, users can buy parcels as an NFT and then develop and build digital installations at the top of them, such as an art gallery.
• A fashion platform, RTFKT, made $3 million dollars in revenue in only seven minutes. They were selling virtual sneakers.
• In another virtual reality world, Somnium Space, the user can own land or is able to produce sellable avatars. From land to avatars to digital art pieces, every single item purchased is a non-fungible token.

Conclusion

NFTs, as we can see, are truly valuable commodities.

They impose scarcity on items that, by nature, are not scarce and, as a result, can fetch incredible value on the market. As with many items, non-fungible tokens are priced quite subjectively; their price depends on the people buying them.

The provenance of such items is easily tracked, with previous owners identified and better increasing the value of these items.

For all NFTs, their utility will only increase their value, and the ability to be used in many ways and locations is a bonus for any NFT owner. Naturally, all of these things add up to increase the value of NFTs, and as a toy for the rich and the collector of arts, designs, gaming items, avatars, and all sorts of different digital bits and bobs, NFTs are going to be a part of all crypto ecosystems in the future.

Also, check out  What is NFT Art.

This Article contains Amazon affiliates link.

The post How to Assess the Value of an NFT? appeared first on The Artist.

The ancient world utilized smoke signals and carrier pigeons. As technology progressed, the discovery of telex, telegraphs, telephones, video calling, and even telepathy technology is revolutionizing the way in which we communicate.

If you simply look back over the last ten years, humanity has primarily utilized the internet for communication, from making new friends, to form new associations and businesses.

Social media and messaging applications have only managed to enrich our communication, even supplanting the use of SMS and phone calls. It’s possible to share documents, videos, messages, and even make video conference calls with more than one hundred people.

Now, we are entering into a new world – The metaverse.

Humans are seeking out more immersive experiences, where the idea is to create entirely new digital spaces where our communications become life-like, like our in-person communication experiences.

In this new world, it’s not simply about engaging in a conversation like we do in video calls already but interacting with others within the metaverse.

This is where this entire concept comes into play. All thanks to the technology of our day and age, as well as the concepts of a decentralized economy, all the changes necessary to bring the metaverse to life can happen seamlessly.

What is the Metaverse?

What even is the metaverse? What does metaverse mean?

Metaverse is a world that can only be found virtually. It can be explored using technology, from computers, gaming consoles, or mobiles, where the user experiences 3D graphics and sound as they explore. These aspects make you feel present in the metaverse, despite being grounded in the physical.

It includes a huge combination of various elements of technological advancement, from virtual reality, to augmented reality to video, where the players or users live within the digital universe.

Those who envision and support the concept of a metaverse envision its users working, playing, and staying interconnected with friends across distances and through everything from concerts to conferences to virtual trips around the world.

Facebook, recently renamed Meta, is one of the largest technology companies staking itself on a metaverse. The company describes it more simply, saying that “The ‘metaverse’ is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.”

The CEO of Meta, Mark Zuckerberg, estimates that it will take five to ten years before the key features and ideas of the metaverse to become mainstream and mainstays for society. Indeed, aspects of the metaverse do currently exist, such as ultra-fast broadband speeds, virtual reality (VR) headsets, and many different, persistent online worlds are already in operation, though they may not always be simple to access for people.

The technologies making up the metaverse can certainly include virtual reality, as many of the systems in the metaverse are characterized by virtual worlds that will continue to exist even when you are not participating.

This doesn’t mean that you require VR or augmented reality (AR) hardware to access such a virtual universe, as it could also mean accessing it from a phone, app, or desktop PC.

A virtual universe, with aspects such as Fortnite, MMORPGs, or social games accessed through computers, consoles, and phones could also be metaversal in scope.

The author of the extensive Metaverse Primer, Matthew Ball noted that

“The Metaverse is an expansive network of persistent, real-time rendered 3D worlds and simulations that support continuity of identity, objects, history, payments, and entitlements, and can be experienced synchronously by an effectively unlimited number of users, each with an individual sense of presence.”

Idealistically, there are several things that can be expected from any iteration of the metaverse.

• Virtual Reality – Many expect that a virtual reality headset of some kind would be a necessity for this. While not necessarily important, a VR headset is designed to make you feel more present and involved in the virtual world, until you bump something physical while stumbling around in your blissful blindness.
• People – It is designed to be social, and as such other people must be present. Lots of people and avatars will be present, and while some of them will not be real, you can spend time with real people and even do things together.
• Persistence – The virtual world must always be online and persist even when you are not there. Every single minor change a person makes must remain when that person goes offline, from objects to buildings. The system relies entirely on individuals making and building content, so this is one of the most crucial factors of any online world.

In most cases, the virtual world will be a direct copy or representation of the real world. Using a drone in the metaverse for example or traveling to see a famous landmark that you could never find the opportunity to see in real life could be ways this is utilized.

Some refer to the metaverse as the digital twin of the physical world.

There are some other names for the Metaverse, such as the ‘mirror world,’ or the ‘spacial internet,’ or even the ‘AR cloud.’

The metaverse also quite easily translates into a digital economy, where users can develop, buy, sell, and trade goods.

In more idealistic visions of the metaverse, it can be operated across multiple virtual realities, where users can take virtual items like clothes or cars from one platform to a different one. In the real world, similar to how you can buy a shirt from the mall and then wear it out to a movie cinema.

Even right at this moment, many online platforms host virtual identities, avatars, and inventories tied to just one platform. A metaversal system on the other hand could allow an individual to create a persona taken everywhere across the network, as easily as you can copy a profile picture from one social network to another.

The DNA of Metaverse

The metaverse must have three distinct layers to ensure that it operates successfully.

Layer 1: The Experience

The expression of the metaverse itself will be built through lived experiences.

This will be through community-encompassing games, social interactions as you would in real life, education, and even live sporting events and concerts for the enjoyment of users.

The goal of the metaverse, therefore, is to develop and build an enjoyable and immersive experience that will eventually supplant the mobile internet we have become accustomed to.

Whether the metaverse is used to meet others, work, play, learn at school or university, or even shop, the metaverse will be all about enjoying content in real-time through virtual reality experiences. It represents a shift from a place to share experiences, like social media, to a place of shared experiences together with others.

Layer 2: The Underlying Economics

Currently, all the talk of the metaverse is centered around a creator economy, non-fungible tokens (NFT), and the ledger-based exchanges that allow people to buy, trade, and sell items.

The NFT market volume is trading at over $700 million dollars and the OpenSea platform is to be valued at $100 billion dollars soon enough. Indeed, Ethereum blockchain marketplaces have proven to be a beneficial and strategic infrastructure when it comes to metaverse economics, but there is still something missing from the equation.

Digital goods are already being traded and as there is currently not so much to do with the things own, it is an investors market. For economies to function efficiently on the metaverse, owners need to be able to do something with their purchased items.

The promises that come with ledger-based exchanges and the creation of alternative coin options that power these allow the transfer of purchased items and their values will be simpler.

Layer 3: The Technology

These things include the necessary online infrastructure and tools required for producing the metaverse, such as network connectivity, computer systems, well-developed user interfaces, and the virtual environment that they inhabit.

This universe involves a 3D environment and geospatial mapping to form the virtual reality fabric, with a combination of both AR and VR.

Metaverse: What can it do?

As technology has been developing and evolving, pop culture has also been evolving.

Typically, the pop culture world has been interested in entire cinematic universes and the metaversal concept fits the bill to satisfy the desires of pop culture.

Eventually, the metaverse will be able to be used and relatable for everyone, not just a select few interested people in our current day.

The metaverse is an immersive universe, boasting real estate and alter-ego avatars of humans engaging with other humans in a variety of different contexts.

All of it comes down to a virtual community, a digital and fully immersive experience of life in the community.

Users can purchase real estate, build an abode, and make friends, which is only further enhanced through the commercial experience where you can buy clothes, shoes, accessories, and many more items you desire.

Nike is just one example of a big-name brand involved in the metaverse, and recently announced the purchase of a company to produce non-fungible sneakers. If it can, Nike wants to ensure that all avatars will be wearing their shoes and not waiting to see the involvement of other companies. It is capitalizing on a good and beneficial investment early before its competitors.

Somnium Space is an example of a world that allows the ownership and trade of virtual real estate. It consists of virtual reality and is built upon the blockchain and even has its own in-game currency known as Somnium cubes, which can be used to purchase items.

The primary funding of the Somnium Space platform stems from the purchase of this virtual real estate, which can be used for things such as social networking, e-commerce, gaming, and even events.

This demonstrates that technology and systems are evolving in a way that lends itself to the metaverse.

This virtual world, for example, can have spaces developed as virtual malls of rentable properties. Should Louis Vuitton wish to set up a shop and sell a virtual product of their items to avatars, they could do so.

Many supporters of the technology see a world where they can rent storefronts to companies who want to sell merchandise but not maintain real estate themselves, rent out virtual homes or even go as far as to design and build custom houses for rich and famous individuals who want to add their presence into the metaverse.

Certainly, playing games is one of the most immediate practical applications, and some games have already begun entering the concept of a metaverse.

Many massively multiplayer online games contain all the aspects which ground the metaverse, and many of the non-fungible token creators have begun working on metaversal tokens and games that can be played across the blockchain.

Games such as Roblox and Fortnite are well on the way towards the metaverse, where their worlds and objects, avatars, and socialization persist even when the player logs off. Fortnite hosted an online Ariana Grande concert which was attended by millions of people, which is just a small taste of the capabilities that a metaverse could hold.

Another example of a video game with metaversal ideals is Eve Online, the massively multiplayer online game set in space.

The persistent world, socialization of the players, and their freedom to make choices impacts everything that happens across the video game.

Some Eve Online players made a bank, such as one that exists in the real world, issued loans, paid interest, and had a CEO, a board, and an excellent organization.

The CEO ended up robbing the bank of two hundred billion of the in-game currency, the equivalent of $6000AUD. The economy of the game functions well, organized by a team of economists with unlimited market potential and driven by players, supply and demand systems, and many different opportunities.

Metaverse: An extension to alter ego

One of the most intriguing ideas to arise during considerations about the metaverse is the propensity of humans to seek out ways to live that are simply not possible in their real life. This could be due to their geographical location, regulatory impositions, or ordinary everyday constraints.

Indeed, the idea of an alter-ego is exciting for many people.

The idea of an immersive world where you can be someone you are not, interact with people you would never meet in real life, and develop yourself however you wish without the constraints of the physical world is an attractive concept.

You can cultivate a personality online that is entirely different from the real you if you wish.

It will be entirely possible for us, as digital avatars, to be smarter, funnier, braver, more talented, and even better looking than we are in real life. It will revolutionize the economy, through aspects such as advertisement, and world culture due to the amalgamation of cultures and people interacting.

Shopping and how companies do business will be changed forever, as some will seek to try things out through the virtual world and purchase items for their characters. Even entertainment, such as the Arianna Grande concert hosted through Fortnite, will never be the same.

The extension of our human lives into a virtual zone has many endless possibilities. The vision at the core is human interaction and it’s not all about gaming systems, although this is one popular usage of virtual reality systems.

A fan of the late Michael Jackson, for example, who was unable to meet him in real life could meet him in the metaverse. They could have a conversation with him, go to one of his concerts they never got the chance to, or buy a house in the neighborhood where he used to live in real life.

One of the largest and most profitable pop culture items in the last ten years has been superheroes, and there are certainly times when humans have felt the desire to be one.

It’s natural for us to avoid these attempts in real life due to fear or worry, but in the metaverse, there is nothing to be concerned about. We could extend our real lives into a virtual world to do things we could only ever dream about doing in our everyday reality.

Workplaces could go virtual, especially during coronavirus times, and have their workplace set up on the metaverse. They could offer their goods and services virtually, meet their colleagues in meeting spaces and discuss as if they were present in person.

There is a lot of traction behind this and the excitement that comes with being able to live and interact with people in a persistent, extensive virtual reality has many people looking forward to the future of technology.

Conclusion

When we go even deeper, the metaverse is built upon a decentralized economic model. While our modern societies exist and function around trust in centralized systems of power, law systems, and economics, all these new forms of trust mechanisms are evolving. These decentralized models offer a much better way of building a metaverse and managing the implicit trust required, in a much more secure, transparent, and efficient way.

Many different communities, organizations, and enterprises around the world have already begun to explore and experiment with these decentralized economic models and as more is understood of this new model of economics, the implications for the future and the way these technologies will be used are exciting.

There are a plethora of opportunities and manners of metaverse use that can be utilized and developed for the good of humanity.

Modern technologies, such as virtual and augmented realities, blockchain, cryptocurrencies, and creators are all essential in further developing these economic models into a function Metaverse.

Many providers are working on such things, in a race to see who can create the best, all in the shadow of the decentralized economic model.

Many movies and books have warned of a dystopian nightmare, but we ought to consider the positive outlooks of such a move.

All the technologies developed over many years, from blockchain to VR to AR, sensors, cameras and even 5G are coming together into a cohesive whole.

Now, most of this is centered around the creator economy of NFTs, smart contracts, and trades and the Metaverse is still missing a lot of pieces, such as utilities and economics.

Nonetheless, there is no doubt that soon enough the real world uses will come to fruition, and as technology continues to develop and build on this incredible concept, we will have a lot more to follow in the years to come.

The post What Is the Metaverse, and Why It Matters? appeared first on The Artist.

Non-Fungible Tokens, or NFTs, are becoming a much more viable solution for artists to create financial value from the digital artwork they produce.

Investors often seek to rely on galleries and auction houses to discover and buy new and exciting art – and now there is a lot of attention on NFT artworks.

The emergence of NFTs is bringing about an artistic revolution, changing how artists can sell their art. These NFTs function as a form of crypto token connected to a digital asset, such as a song, a piece of digital art, or royalties. This, in turn, assists artists in selling their work directly to art connoisseurs.

What is NFT Art? What is the meaning of NFT?

NFT stands for Non-Fungible Token.

NFT art is a collectible digital asset that can be tradeable in the digital world.

For obvious reasons, traditional works of art such as paintings are valuable because they truly are one of a kind – painted by hand, with a special technique, often with special paint.

As we are well and truly aware, digital files can easily and endlessly be copied and pasted as much as the owner wants. Not so with NFT artworks and assets. These items are bought and sold with a digital certificate, showing ownership of a unique virtual or physical asset that someone has produced.

Like everything else in our world, these digital items can only have one official owner at a time.

These are secured and protected by blockchain technology, an incorruptible database that cannot be tampered with. Blockchains are a database that cryptocurrencies such as bitcoin and Ethereum utilize and, if they wish, could implement their system for NFTs.

NFT artworks are digital art that allows you to prove ownership of a store of value

In technical terms – “Non-fungible” means that it is completely unique. “Token” means that it can be transferred on a blockchain. Essentially, NFTs are assets that carry a unique digital identity (Tezos)

Due to the nature of blockchain, no one can change the record of ownership nor copy or paste to create a new version of the NFT. They can be easily traded, verifiable, and have no tangible existence in the real world. While NFTs utilize the same database as cryptocurrency, it allows them to store extra information, making them work differently.

What is “Fungible” in NFT? How do NFTs work?

When we consider economics, something that is a fungible asset has units that can easily be interchanged, such as money.

The definition of fungible is any item (of goods contracted for without an individual specimen being specified) replaceable by another identical item; mutually interchangeable.

The definition of a token is a sign, symbol, or a piece of stamped metal used instead of currency. For example, a gift is sometimes referred to as a token of the giver’s esteem for the recipient. In the digital world, any representation of value is called a token – and these tokens can be fungible or non-fungible.

Fungible and non-fungible tokens have a few differences, the main being that fungible tokens are interchangeable, divisible, and uniform across all types and usage. 

Fungible tokens are any items that are exchangeable and interchangeable with a token of an equivalent type or value.

A $10 note can be seen as the same thing as two $5 notes. We know that these have the same value. In the same way, ether and dollars are fungible, for example, because 1 ETH is equal to $1 and can be exchanged as such.

Hence all cryptocurrency assets are fungible and can be interchanged for other currencies of the same value, such as one bitcoin for another bitcoin.

In addition to this, fungible tokens are easily divided. One unit of a fungible item can be divided into smaller portions of their units.

For example, a bitcoin does not need to be purchased as one full unit.

It is entirely possible to purchase bitcoin in small parts, such as 0.25BTC.

Non-fungible tokens, on the other hand, are not interchangeable, not divisible, and unique in their style and function.

If an item is non-fungible, this is quite simply impossible. The item has such unique properties that it cannot be interchanged with something else of similar value.

For example, the house you live in or a painting such as the Mona Lisa are one-of-a-kind items – they cannot be reproduced, and their value cannot be interchanged.

Sure, you can take a photo of a painting or buy a print of it, but it will never be the same as the original painting you saw.

The term can describe furniture, a song file, real estate, collectibles, or even your computer. Think of rare Pokémon cards, old coins, GIFs, tweets, video game skins, virtual real estate, or some of the rarest Air Jordan’s in the world.

These things all have properties that make them unique, usually with a certificate of authenticity to prove it.

Not only this, but they are also in a scarce supply amongst the assets with infinite availability to the masses.

In the simplest of terms, an NFT makes digital items, works of art, or other collectibles into a “one-of-a-kind” asset that can be bought and sold by their makers and buyers like any other property.

Non-fungible tokens are not interchangeable with any of these same kinds of tokens. They can be artifacts, digital art, game items, avatars, and the like, which have no equal to other NFTs.

Not so with NFTs and NFT artworks, which cannot be divided into smaller units. Anyone seeking to buy a non-fungible token must buy the whole unit or not at all.

Uniformity is also an aspect of fungible tokens, which means they each hold the same value across all tokens when they are the same type.

One bitcoin will always hold the same value as another, which cannot be altered.

However, when it comes to NFTs, all tokens are designed and created to be unique, and every NFT is not identical to any other. This applies to NFT artworks as well.

This means that their value will also be different and unique.

What is the technology behind NFT artworks?

NFT relies on blockchain technology.

The decentralized and unique nature of blockchain helps create new ways in which art can be produced and acquired.

The use of blockchain can alleviate some of the power big collectors and dealers hold over the art world, shifting some of the power back to the artists. The move cuts out the mediators in the middle who often seek to take out a big cut of the profit made on an art sale, and this means the artist is of high advantage.

For art investors, a model over blockchain would provide more incentive to provide a backing for new and promising talent, taking advantage of the art valuation growth by joining an artist in the beginning.

Art collectors pay ridiculous sums of six to eight-figure values to acquire a piece of art when often the works they purchase can be seen and shared online for free.

Many critics have suggested that the NFT idea is just the latest fad, much like the Reddit stock market bolster of stocks like GameStop.

However, the NFT artwork craze is attracting groups of artists and investors, speculators and their imaginings seeking to get rich off the NFT idea, while a subtle emergence of a new economy is rising.

How do artists price NFTs?

Anyone can make a token and sell their creations as an NFT, but interest has recently garnered through several high-profile, multi-million-dollar sales.

The price of the NFT artwork defines by the subjective value of your work.

How to Assess the Value of an NFT?

The “value” of any object is not defined by the number of resources and the hours of labor that went into creating and producing it but is variable according to its context and the rationale or perspective of its users. The theory argues that any object’s value is determined by the individual buying or selling it.

Why NFT artworks are gaining so much momentum in the art world?

There are several reasons why it has gained so much momentum in the art world, from freedom of expression to the removal of the middleman.

Freedom of Expression

One of the greatest things worth celebrating about the NFT system is that it boasts the incredible ability for artists to freely express themselves.

Digital arts medium has no limitations, and the artist, unlike more traditional art forms where the artist is confined only to a canvas or a photo.

NFT artworks have altered the definition of art, helping to make the art world and art forms more inclusive of digital expression than ever.

Many artists are working in unusual, controversial, and often groundbreaking art styles in digital art, and these are received much interest from the collectors and investors in NFT art. Some of these, such as whirling 3D images, oversaturated street-style artworks, and cartoons, thrive in the online marketplace.

The younger generations who spend all their time on Instagram and all the individuals who are drawn to cryptocurrencies are drawn to the aesthetics, fueled, and given screen-time by the internet.

Mat Dryhurst noted that “the street art and countercultural style are being used to reinforce the impression that most finance-crypto people have that they are the ‘punks’ in the broader tech and finance world.”

No Middlemen

Being online, all of this happens without the support network of the galleries of the art world.

In some ways, the galleries are gatekeepers, choosing who or what to display or taking big cuts of the work when it is sold.

The artists who produced NFT art are forming online groups and communities where they help each other and educate one another across their networks.

Several artists from India have produced digital artworks and sold them to collectors in other countries worldwide. 

Alternative Investment

Investors normally have a diverse portfolio, and many big businesses and celebrities use the blockchain platform to purchase and sell NFTs.

Some, such as the NBA Top Shot, are using the official platform of the National Basketball Association to buy and sell basketball highlights online, packaged as digital trading cards. According to its parent company, these sales have amounted to over 390 million dollars in sales since it was launched.

Football star Rob Gronkowski has sold some Super Bowl highlights as trading cards for over 1.6 million dollars, and the rock band Kings of Leon sold some music as NFTs for over 2 million dollars.

Twitter’s founder’s first tweet put up for auction is expected to sell for 2.5 million dollars. As time goes on, NFTs are selling for higher and higher millions of dollars. 

Proof for Many

The NFT movement is evidence of the belief that these technological developments, such as cryptocurrency and blockchain platforms, have the chance and the power to change the world as we know it.

Blockchain technology has already been utilized to improve voting security in the United States of America, combatting insurance fraud, and secure the medical information of several United States healthcare enterprises.

Advocates for the blockchain systems say that it can assist companies with ensuring transparency within their chain of supply, streamline processes such as mutual aid efforts, and reduce bias when it comes to the loan application process.

Key Challenges in NFT Space

As with many technologies, there are certainly challenges to be overcome by the NFT movement.

Even as many people benefit from the craze, there is a darker side. There are barriers to entry, as it costs money and requires knowledge of technology to be able to sell an NFT, which could easily prevent certain artists from participating and selling.

There are some concerns that this would especially impact young artists of color, who have traditionally been marginalized within the physical art world. The experts in law are faced with difficult discussions about how copyright laws will impact or need to be updated to catch up to the innovative technology, as some people have stolen and sold the work of others as NFTs without artist permission.

If people can steal something, they will, and “it’s providing another platform for people to take advantage of other people’s work,” said Connor Bell, someone who has experienced this.

Of course, there are also concerns about the impact on the environment.

Creating an NFT requires a huge amount of computing power, and the server farms used to produce such a digital asset are powered by fossil fuels.

An assistant professor of visual arts administration at New York University, Amy Whitaker, notes that “the environmental impact of blockchain is a huge problem.” The majority of the major NFT marketplaces use the Ethereum blockchain, which uses a lot of energy to work.

The system uses a digital mining process like Bitcoin, where computers solve complex Math problems to verify and confirm transactions. 

The popularity of Ethereum is mostly due to how it can deal with transactions outside of its blockchain, and this fact makes it a much more flexible system than Bitcoin. Due to its complexity, it is known that it requires enormous amounts of energy to process transactions.

However, some advocates for cryptocurrency consider these fears to be overstated. These proponents suggest that the energy use is offset by energy reductions in other areas, such as reducing manufacturing, shipping, and transportation energy costs. In addition to this, NFTs don’t use natural resources, so no paper or ink is used or consumed in the process.

Notable NFT Projects

Several NFT protocols, or projects, make a lot of money through the sale of NFTs. Mentioned already is NBA Top Shot, but here are some other examples of NFT protocols taking off.

From marketplaces to financial tools, collectibles, and gaming ecosystems, this list of NFT uses has something for everyone. 

Marketplaces 

There are many marketplaces available for NFTs, and the items that follow are a selection of such. 

OpenSea

OpenSea is an NFT marketplace, self-described as the largest in the world. Here, you can search for NFT artworks (non-fungible tokens), purchase the ones that you desire, and sell the ones you have created. From art to music to trading cards and other collectibles, OpenSea has it all. 

Rarible

Rarible is a place for creating and selling custom NFT artworks and assets that represent the ownership of the token. Some of these items are artworks and memes and can even include virtual land. The platform contains its cryptocurrency, the RARI. 

TokenTrove 

TokenTrove is a NFT marketplace for collectors of popular crypto assets and digital collectibles. Featuring prominently on the home page are game cards for Gods Unchained, a popular Magic: The Gathering style game on the Ethereum ecosystem, amongst others listed.

MakersPlace

A place designed for some of the world’s most creative minds, MakersPlace seeks to provide a platform for NFT artworks and their creators, all issued and signed by their creators. It’s a place for authentic and truly unique digital works of art.

KnownOrigin

KnownOrigin, an artist-driven marketplace for rare digital or NFT artworks, is designed to make it simpler and easier for digital artists to create, authenticate, list, and sell the artworks they produce on the Ethereum blockchain. According to its website, every digital collectible is authentic and unique.

 Cargo

Cargo is a NFT marketplace platform designed as an all-in-one place for selling non-fungible tokens. It’s a platform to create, manage, display, and sell NFTs, from digital art to gaming items, tickets, etc. It makes full use of blockchain technology, and any digital collectibles owned can be managed through Cargo, whether Ethereum, xDai, or Polygon. 

Blockparty

Blockparty is a storefront platform designed for creators and brands, allowing these groups to easily create verifiably unique, connected items that can bring utility and joy to their buyers online and offline.

Mintbase

Mint base is a NFT marketplace containing both auctions and stores, which allows creators to create their non-fungible tokens easily and simply, without worrying about all the technical issues that come with it. It’s a place for digital artworks, music, and event tickets. It’s sometimes called the Shopify of non-fungible tokens.

Zora

Zora’s a place to buy, sell, and trade limited edition objects, including some unique NFT marketplace, takes. Their items are dynamically priced, based entirely on the supply and demand of an NFT. Items can be fractionally traded, where people can buy and sell parts of an item to determine its value. Some items can be launched before they even exist, allowing the community to purchase before an item is ready to go. 

SuperRare

A decentralized NFT marketplace and social network for NFTs, it uses the Ethereum blockchain network for minting items and making the token 100% unique. It can be bought, sold, traded, or HODLed (held by the investor despite drops in value). Super rare has quite the waiting list, with one user said to have waited one and half months for approval.

Nifty Gateway

Nifty Gateway is an auction platform owned by the Winklevoss brothers, specifically working with digital art. It has sold artworks from many world-renowned digital artists, including Beeple, Grimes, LOGIK, and other widely popular creators.

Async Art

A new form of digital art creation, Async Art is a movement that seeks to create, collect, and trade art; this is unique in that it is programmable. The works located here are split into layers, which can be used to change the image. Art can evolve, react to its owner, or follow a stock price. 

Business and Finance

 NFTfi

NFTfi is a place where NFTs are used as collateralized loans. Owners of NFTs can put up their assets as collateral for a loan or provide loans to other NFT owners on their NFTs. Using NFTs as loan collateral, especially considering the value of many NFTs is just as helpful as using a car or house. 

NFTX

NFTX is a location that provides liquidity for illiquid NFTs. Liquidity means that an asset can be easily and readily converted into cash without impacting the item’s market price. The platform seeks to form fungible versions of the most popular non-fungible token collections, providing more accessibility for the items and more liquidity for users. 

Centrifuge

A centrifuge is an online protocol that allows investors and businesses to do a variety of things. It’s a connection point for decentralized finance and allows owners to link assets such as invoices, real estate, and loyalties, tokenizing these real-world assets on the blockchain network. 

UpShot

The upshot, another online protocol, is a website that hosts games asking subjective questions on non-fungible tokens. The appraisals of these NFTs are crowdsourced, which seeks to ensure that the marketplace for all users is fair and honest. Experts are paid for their work and unlock new opportunities for work for many.

NINTEX

Typically, non-fungible tokens are unable to be broken up into smaller pieces. NIFTEX is a place that allows owners of NFTs to break their non-fungible tokens into fungible fractions, which allows owners to open many different possibilities, such as liquidity, valuation of assets,s and much wider, cheaper access to such digital items.

yInsure 

Like any fungible asset, insurance of your hard-earned and expensive items is important. Such is the case, too, with NFTs. yInsure is an insurance platform that has been developed to provide insurance for cryptocurrencies, decentralized financials, and non-fungible assets. 

Collectibles

 CryptoKitties –

CryptoKitties is an incredibly popular collectible blockchain game where users can purchase, collect, and breed an assortment of cats. You can earn rewards, play puzzles, unlock rare cat traits through breeding and play games with other owners. Each NFT collectible cat is one-of-a-kind, unique and 100% owned by the user. The cat cannot be replicated, removed, or destroyed. 

CryptoPunks

One of the first non-fungible tokens used on the Ethereum blockchain, CryptoPunks are 100% unique, collectible characters. All proof of their ownership is stored on the blockchain. There are 10,000 punks in total, and while originally free on release for those with an Ethereum wallet, they were quickly taken up by their owners. Anyone seeking to own a CryptoPunk must buy or bid on one from their owner.

NBA Top Shot

The National Basketball Association of North America, the NBA, has officially licensed a trading card game through the blockchain. These non-fungible cards are collectibles and official items from the sport. Users can collect common and rare cards and trade them online through the blockchain platform.

Avastars

Avatars seek to create their own metaverse, where these avatars are seen as a digital collectible in this world. These tokens are generative, addictive, and contain various artworks and styles that make every avatar unique, from their skin color to their hairstyle to their facial features.

SoRare

Another location for playing cards, SoRare, is a global blockchain-based fantasy football game. Users can buy, sell, trade, and manage their virtual team of players. Players can enter tournaments for free and play against others. Being located on the blockchain, every card is unique, and each is registered as a one-of-a-kind, non-fungible token on the Ethereum ecosystem.

Gaming ecosystems

 Axie Infinity

A virtual world in the same vein as Pokemon, Axie Infinity is full of wonderful, fierce, adorable, and strange pets called Axies. These creatures can be battled for glory, traded, bred, and can even be used to earn cryptocurrencies. There are many different Axies available for sale, and as of May 2021, it is considered the most expensive collection of non-fungible tokens in the market.

CryptoSpace Commander 

A space massive multiplayer online game, CryptoSpaceCommander (CSC) contains combat mechanics, a player-owned and operated in-game economy and a huge crafting system. Players have a lot of freedom, from travel to mining to battling others. Everything you own is secured and protected through the Ethereum blockchain, which secures assets and enforces player-to-player contracts. 

Gods Unchained.

A trading card game to rival Magic: The Gathering, Gods Unchained is hosted on Ethereum and is totally free-to-play. Anyone who wants can pick up the game and begin and earn cards and in-game currency as they play. Unlike many traditional games, the cards you earn are 100% yours. They are minted and verified on the blockchain, and they are owned by the player. All cards can be sold for in-game currency and traded.

MyCryptoHeroes 

An RPG battling game, MyCryptoHeroes, is built entirely on the Ethereum blockchain. Users collect heroes inspired and based on historical figures, can send them on quests to earn rare items, and can battle against the heroes of other players for fame and glory. The game is the number 1 blockchain-based game based on daily transactions and users. 

Systems and Platforms

 Polka Foundry

The PolkaFoundry is a place set up solely for developers. This place is for you for anyone seeking to create decentralized finance or a non-fungible token application. Through Polkadot, you can make NFT auctions and marketplaces, lending platforms, insurance, and more.

Phala

Phala is a network that is designed as a privacy-preserving cloud service, working as a part of the Polkadot ecosystem. The system is comparable to all the current cloud services across our devices and works at protecting the privacy of programs managed under its umbrella.

Data and Privacy

 Snicker Doodle 

Snicker Doodle is a tool built on blockchain technology designed entirely with the focus on protecting users’ privacy. Additionally, it creates value for all shareholders, including data owners, who own and monetize their data as they see fit.

Nonfungible

Nonfungible is self-titled the world’s largest NFT data resource for a good reason. It contains a real-time market analysis of different non-fungible token projects and their sales, valuations of portfolios, consulting services, and a large knowledge bank on all things NFT. It exists as a research platform for the NFT market and contains much useful information.

NFT Bank

NFT Bank is a useful resource for anyone holding a portfolio of NFTs. It works well as a portfolio tracker, a tool to analyze the worth of your portfolio, check your inventory, and get a much more comprehensive understanding of the NFT investments. It also holds an analytics tool, which allows you to check the provenance of an item, and who and where it came from.

Virtual Worlds

Somnium Space

A virtual reality world, Somnium Space is an open-world social game. It can be accessed in both 2D models from a user’s computer as well as through a headset; it contains its own economy, marketplace, games, social experiences, and even ownership of land, all through the blockchain network. 

The Sandbox

The Sandbox is a community-built project where the creators of voxel block-based worlds can monetize their assets and gaming experiences on the blockchain network. All NFTs are user-generated content, with land, voxel-based art, and an in-game marketplace to buy all of it. Users can build 3D games for free using all these assets.

 Cryptovoxels

Cryptovoxels is a user-created and owned virtual world powered by the Ethereum blockchain. Players can create anything they want on land which they purchase, from stores to sell things or art galleries. The game contains all the necessities, from building tools to chat boxes to in-game avatars. 

Decentraland

A virtual world wholly owned by its users, Decentraland is a place to create, explore, and trade across an expansive, user-created world. Many users have developed amazing scenery and buildings on land they have purchased. From villages to dungeons to space, there is something for everyone.

All assets on the in-game marketplace are backed by the Ethereum blockchain, where you can find real estate, wearables, and even names.

Conclusion

There are many ways that humans can utilize NFTs in everyday life. From marketplaces and finance to gaming and virtual reality worlds, NFTs and NFt artworks are truly unique in their application and provide a significant utility across genres.

As technology progresses into the future and as we get more and more excellent ideas on how to utilize this incredible technology, there is no doubt that the possibilities for NFT use will multiply. The developments that we have today will have even more applications tomorrow, and the future ahead of us with blockchain technologies is exciting.

It’s clear that NFTs are in the limelight during this time, and the creators of NFT artworks, such as artists, gamers, and big business brands across the world, are certainly cashing in on big money.

A new player seems to enter the NFT marketplace daily, bringing with them new NFTs to be sold in a desire to earn big.

What is NFT artwork? Whether they are here to stay or soon to go, in the here and now, they are mostly the toy for the rich and powerful, the ones with money that can make it all happen.

The non-fungible token phase of the 21st century gives a new meaning and purpose to NFT artwork and its artists, and the huge costs of these works online suggest that the digital works produced by artists of our day and age have a future in the art world as we know it.

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