What are NFTs? Why some of them have worth of millions?NFTs are digital assets that are not subject to traditional currency controls. They can be used for anything from digital gaming currencies to issuing company stock. In the past, NFTs have been worth only a few cents each. But as Blockchain technology has become more popular, their value has increased dramatically. Some NFTs are now worth millions of dollars. So what makes them so valuable? And why are they becoming more and more popular? Let’s take a closer look at NFTs and find out!
1. What are NFTs and what makes them different from other types of digital assets
Recently, NFTs have been making waves in the cryptosphere for their unique characteristics that differentiate them from other digital assets. What are these differences and why do they matter?
The term “NFT” is an abbreviation for non-fungible tokens. What makes NFTs different than fungible tokens (e.g., BTC) or other types of digital assets (like domain names, databases, media files) is that each token has its own unique attributes which cannot be substituted by another token with the same properties. Imagine playing a game like Pokemon where you can collect different monster characters to join your team. Each character has strengths and weaknesses that make them unique — no two characters are alike in terms of powers or abilities! This is how NFTs are depicted.
Let’s take a closer look at these attributes that make this possible, and why they matter to the crypto-space.
1) What makes each token unique?
There are two types of attributes which render tokens unique, as follows:
a) Tokenized assets or items where their identity is tied with administrative rights over an item (e.g., ownership of a plot of land), similar to non-fungible goods in real life
b) Attributes which can be used to distinguish between several different tokens through the use of smart contracts, i.e., metadata associated with the token that does not affect its fungibility but allows it to have certain properties/behaviors within different platforms
2. How can you get your hands on NFTs and what are the risks involved
Today marketplaces exist where people can buy and sell NFTs. What are they exactly, why are some worth a lot of money and what risks do you face when looking for them?
If you buy a 1 ETH token then this token is equal to any other 1 ETH token. However with NFT’s each token has something unique about it because it represents something else not just value like normal tokens. In fact these unique things are often physical items such as special cards or characters from popular games. Therefor one Ethermon character might be better than another Ethermon character depending on its rarity and abilities. What makes the NFTs so unique is that they cannot be duplicated like other tokens such as Bitcoin. What this means is that every individual token needs to be accounted for by a smart contract (the Ethereum programming language). Such contracts are transparent and anyone can look at them and make sure the transactions made within them are accurate. This has lead to people trying to sell their NFTs on market places like OpenSea, where all of these transactions take place under the user’s wallet address and name through decentralized applications (dApps). One Ethermon for example currently costs about $3, while another famous cryptokitty Mona Kitty recently went for 250 ETH or about $90,000.
The risks of buying or selling NFT’s on decentralized market places, is that there is no one to report to if anything goes wrong. It is a peer to peer system where it is every person for themselves. What this means for instance that you might enter into an agreement with someone about a price and then never receive the product/service after sending the Ethers. What needs to be kept in mind is that these transactions are not reversible so think before you buy/sell!
3. Why are some NFTs worth millions and how is that possible
NFTs or Non-Fungible Tokens are a relatively new way of creating a digital collectibles. What they do is that they make use of Blockchain to keep track of the ownership and the value.
How do NFTs work? What makes them different from other cryptocurrencies is that these tokens, unlike Bitcoins for example, cannot be duplicated thus becoming quite valuable as there will ever be only one of each token in circulation at once. You might think “okay, so what gives it its value?” It’s actually not that simple but we’ll get into that later on.
When you consider other types of virtual items such as video games’ currencies and other character customizations, you start to realize why this type of asset can be so valuable. What NFTs do is that they give an actual value to digital assets which means you can actually take another person’s possessions and something of yours could be taken away from you if someone else manages to obtain it. This degree of ownership brings a whole new element in the world of video games, social media and other types of networks where people interact through virtual items rather than real-life goods.
CryptoKitties was one of the first NFTs actually launched on the market but there are many others such as Etheremon, CryptoBots, Decentraland, etc., who have also succeeded in launching their own tokenized assets. What made CryptoKitties become so popular when it was released? What was so special about it? What made people start buying cats for more than $100,000 each just to resell them at a higher price after that?
These virtual collectibles managed to reach the mainstream media which shows us that this market is still growing and could be huge in the next few years. What do you need to know if you’re interested in becoming an investor in NFTs? What can we expect from this type of asset in the future?
One of the most important things that most potential investors look into before purchasing any digital asset is its intrinsic value . What determines how much money you’ll pay for something is how much it’s actually worth. What intrinsic value is you ask? This is the actual usefulness of a particular item whether virtual or real. What are their use cases? What can they do in the real world that makes them so valuable?
When it comes to NFTs, which currently consist mostly of characters and other gaming items, there’s not much that sets them apart from any other digital asset. Their functionality in modern video games depends on what game they’re being used in but this isn’t enough for people looking to make some money out of them. What is making these assets grow right now is speculation .
Unlike Bitcoins who have their own utility in Blockchain technology, NFTs are yet to find an application outside of video games or social media. What makes them a valuable investment is the amount of speculation surrounding their growth in the future. What gives these types of digital items value is that they’re bound to become more popular with time which means that their demand will grow too and if people actually find a way for NFTs to be used outside of gaming, there would be no limit as to how much could one tokenized asset be worth.
4. What could happen to the value of NFTs in the future and is there a risk of a bubble forming
Non-fungible tokens, or NFTs, are a way to store and transact digital assets on the Ethereum network. What makes them special is their unique characteristics – no two items of the same type will be identical in code or appearance. What this means for users is there can be one item that they cherish more than others. Maybe it’s been rare from the start since it’s based off an original design from a famous sculptor, maybe it’s been highly sought out by collectors over time as its price goes up due to its limited supply, or maybe players have driven up demand because a particular ERC721 token is needed to access a certain service across multiple games. Whatever the reason may be, these digital assets can hold significant value for their owners.
The userbase is growing every day and the number of games that use ERC721’s to store digital assets in their system is also increasing, meaning there are more items to collect, trade and sell than ever before. This will likely drive up demand over time (for both NFTs in general and specific tokens), which could cause a sharp rise in prices eventually once many people start treating these non-fungible tokens like traditional collectibles.
5. How do you store NFTs and is it safe to do so
There are many ways to store your NFTs, but not all of them are safe. Unfortunately there have been scams involving people copying the code/the address of your token and sending it to their own address which you can see here and this is just one example of how things can go wrong if you do not take precautions! You will need a wallet that allows you to customise functions on your tokens so they cannot be copied by anybody else. So I would recommend any ERC-721 supporting wallets listed in section 3 as these have certain security protocols built into them so the assets you send cannot be stolen by exploiting simple vulnerabilities in smart contracts.
The Ethereum network has enabled us to create digital scarcity; something no one could have imagined 25 years ago. I am so excited to be a part of something so revolutionary and I urge anybody that is interested in this topic to keep up with our blog which will soon have even more interesting content for you all, including interviews from experts in the industry and technical breakdowns on how smart contracts work.
6. What are some of the most popular NFT projects out there right now
NFTs (or non-fungible tokens) are a new and exciting branch of crypto collecting. They bring the fun back to crypto collectables, and in many cases they can be worth much more than their fungible counterparts. The following is a list of some of the most popular NFT projects out right now:
Unico Decentraland – https://decentraland.org/
Man has not yet explored all that exists between heaven and earth. It’s time to Unico! A world designed for users, by users… That you can access from anywhere on Earth… Sometimes called Metaverse or OASIS, the lines between what is real and virtual have been blurred forever! In this place anything is possible. The only limit is your imagination!
Cats and dogs, dinosaurs & dragons…Unico brings the whole zoo to your screen. Discover, collect and breed them all!
The most fun of any virtual world with amazing features that will blow your mind:
– Buy and sell 100% safe in-game goods in a global simulated economy.
– Rent Virtual Land for yourself or to share with friends and family, creating whole new worlds in seconds! https://decentraland.org/
Tron Dogs – https://www.trondogs.com/en/index TronDogs is an ecosystem established upon TRON blockchain which allows players across the world to adopt, raise, play, and trade with each other. TRONDogs also runs a wallet called TronLink which you can use to manage your virtual pets!
Monster Legends – https://monsterlegends.com/ Fight monsters, collect eggs, hatch new species and breeds of monsters, fight in the arena and become a hero! With Monster Legends players can explore a world filled with fantastic beasts that need to be tamed!
My Crypto Heroes – https://mcryptoheroes.com/ In this RPG game, heroes from all time and space have been summoned for battle. Build up your team of brave heroes by defeating enemies or hunting for treasure whilst fighting through an epic campaign! Mastering trading will help defeat more powerful foes, while collecting items will help build up your party!
Fantasy Fair – https://www.fantasyfair.io/ FantasyFair is a decentralized crypto-gaming platform where users are able to challenge each other in thrilling head-to-head matches involving one or more bewitched characters from all time and space! The same characters can also be bought, sold or rented at the marketplace.
Blockchain Cuties – https://blockchaincuties.com Blockchain cuties is an adventure game based on ethereum blockchain technology that uses ERC 721 tokens for all game asset trading within the game using ETH cryptocurrency as trade volume currency.
Jurassic World – https://jurassicworldao.com/ Jurassic World: Alive takes the hit mobile game to the next level by introducing real-time player vs. player interactions in a persistent online world! Assemble the ultimate dinosaur strike force and reach new heights of power on an uncharted island filled with mystery, danger, and dinosaurs!
Decentraland – https://decentraland.org/ Decentraland is a virtual reality platform powered by the Ethereum blockchain. Users can create, experience, and monetize content and applications
NFT market cap rankings ( https://coinmarketcap.com ) Cryptokitties – $62 Million CryptoBots – $10 Million Etheremon – $8 Million CryptoDogs – $7 Million Blockchain Cuties – $4 Million Dinosaurus Land* – $1.