NFTs and Beyond — The Future of Blockchain Technology
The history of NFTs can be traced as far back as 2012. Colored Coins were first released on the Bitcoin network, with the idea that these coins represented value for various use cases that the community agreed on. Colored coins are tokens that reflect real-world assets and may be used to establish ownership of everything from precious metals to vehicles to real estate, as well as shares and bonds. The initial concept was to utilize the Bitcoin blockchain to store assets such as digital collectibles, coupons, property, company shares, and more. They were regarded as novel technology with a lot of untapped potential for future applications.
However, Bitcoin’s programming language was not intended to host this type of behavior within the network, which meant that the Colored Coins were essentially at the mercy of their weakest link. An example would be if 5 individuals agree that the value of 20 Colored Coins would represent 100 company shares then If one participant decides against this, the value is considered void.
According to Forbes Demand for NFT continues to grow, and that the market shows no signs of declining. In less than three months, the total market share of key NFT projects has risen by 1,785% per annum.
Majority of Beeple’s NFTs sell out almost immediately, with the most high-profile piece fetching over $70 million. The attention these sales have garnered is why many celebrities are cashing in on the NFT craze by launching their own flagship collections.
Many prominent NFT or blockchain gaming-focused projects have captured a considerable portion of the market in recent months, including THETA by Theta Network, ENJ by Enjin, SAND by Sandbox, and AXS by Axie Infinity.
Prominent NFT markets like Rarible and Opensea have also seen sales increase astronomically as of late. In the first week of January 2021, Opensea barely made $5 million in total sales. Since then, their total revenue has risen to nearly $100 million in a span of just three months.
Because of this, companies, funds, exchanges, and conventional VC firms from both the crypto and IT sectors are making significant investments in the NFT industry. Andreessen Horowitz sponsored a $23 million round for Opensea, demonstrating the major venture capital firm’s belief in the NFT market’s long-term direction. Other examples include the following:
- To develop branded NFT Fan Experiences, Recur collected $5 million from top crypto funds and individual investors, including Hashed, Gary Vaynerchuk, and Delphi Digital. Several high-profile NFT platforms are set to emerge in the coming months.
- To create an NFT game, The Crypto Prophecies received investment from top Defi funds and Polygon, one of the major second-layer scaling solutions.
- A direct investment in Refinable helped Binance launch their Smart Chain’s initial NFT markets.
Defi-focused funds are also investing heavily in NFT insurance and fractionalization platforms, further developing the entire NFT infrastructure in the coming months. The most extensively invested areas in the market include NFT marketplaces, insurance, fractionalization, trading, and indices.
Types of NFTs
The expanding infrastructure and opportunity for innovation in the field of NFTs can help them find applications in a variety of fields. As a result, the development of new types of NFTs is a fair expectation. Here’s a look at some of the most well-known NFT kinds that are currently in use:
The emergence of CryptoKitties, one-of-a-kind digital assets represented by cartoon cats, is the most prominent example of NFTs. They vary in design and rarity, and prices can range from anywhere between $100-$50,000 as of the time of this writing. This was one of the first projects that brought attention to the NFT sector back in 2017.
Another popular use case for NFTs is art collections. In this sector, the most common forms of NFTs are sold as ‘programmable art’, which is a unique combination of creativity and technology. Creators might benefit from the usage of smart contracts to create works that are represented on blockchain networks.
Event tickets are another intriguing addition to the NFT space. At events like music festivals and concerts, NFTs can be used to verify identification and tickets. On the blockchain platform of their choosing, event organizers can print a certain number of NFT tickets.
Music and Media
NFTs are also employed in music and the media, which has led to the creation of a new class of NFTs. Music and media files can be linked to NFTs, allowing anybody with a valid copyright claim to access them.
In the gaming industry, the most frequent forms of non-fungible tokens are used to represent in-game products. NFTs have sparked a lot of excitement among game creators. They can provide the functionality of in-game item ownership records, allowing in-game economies to flourish.
Even if there aren’t many NFTs that can be used as real-world tokens, development in the NFT domain is allowing this to happen. Many NFT initiatives, for example, are currently concentrating on the tokenization of real estate as well as luxury items.
The sale of memes as NFTs has been the most important breakthrough in the space as of the last couple years. Memes have been linked to NFTs, despite being a part of popular culture and an instant favorite among internet users.
Tracing all the way back to the dotcom bubble in the late 90’s, ownership of unique domains has always been a good investment for potential buyers in the future, just like how the value of land can appreciate over time. Domain name NFTs include Unstoppable Domains and the Ethereum Name Service (ENS), which are both decentralized domain name services that are powered by the ERC-721 protocol, smart contracts that prove ownership.
Three trends that are shaping the landscape of blockchain technology
NFTs are generating buzz
According to Cointelegraph, the total lifetime NFT volume on Ethereum has surpassed $120 million, with at least $10–20 million in growth left . Nonfungible eliminates a number of platforms, including Rarible, which has seen its volume exceed $10 million in recent months. NFT’s average price has risen sharply, reaching $161, the highest level since CryptoPunks and Cryptokitties began in 2017.
As per Al Jazeera, the market for non-fungible tokens (NFTs) surged to new highs in the second quarter, with $2.5bn in sales last year, up from just $13.7m in the first half of 2020.
Liquidity Mining for NFTs
WHALE and MEME, two previously unknown coins, experienced a period of tremendous growth due to the recent excavation of the concept of NFTs in mainstream media. Surprisingly, both have created liquidity in different ways. The WHALE community participated in NFT yield farming by working with creators to produce unique NFTs uploaded to Whale Vault and available exclusively for purchase using WHALE tokens. DeFi and NFTs combined to generate new forms of yield that can pique the interest of many different players in the ecosystem.
Rarible, a marketplace and minting platform, was one of the first entrants in the NFT mining business. It supercharged its user base’s growth by airdropping RARI tokens to anyone who has traded a reasonable quantity of NFTs. It was a governance token that it utilised to convert its marketplace into a decentralised autonomous organisation (DAO).
Community Tokens are the next logical evolution for the NFT trend as the ecosystem grows and the public is more knowledgeable about the benefits of blockchain based technologies. In fact, it can be said that NFTs paved the way for the concept of Community Tokens to become the next major trend in the industry.
Creators aren’t the only ones who may benefit from community tokens as even huge corporations with well-established communities are also likely to capitalize on this trend. Professional sports is one of the most apparent extensions of community tokens.
Although large companies are often hesitant to innovate, many are gradually realizing the enormous potential of tokenization. In order to improve revenues and customer loyalty, organizations will begin to experiment with new technologies such as community token offerings and loyalty-based rewards on the blockchain.
BitFans is a platform meant to enable anyone with access to an audience to mint tokens that are tied to their brand, reputation, and potential for community growth. Using this, the tokens are designed with alignment in mind for more adoption amongst new and existing audiences.
As it stands, creators use centralized systems that take a substantial percentage of their earnings. BitFans creates avenues for creators of all sizes and leverages the use of community tokens. As a result, fans have few alternatives for actively supporting the creator’s success. There is now a method to construct a fan club of customizable distribution techniques and community tools through community tokens.
Creators may use community tokens to expand their following and generate new value streams by creating a digital ecosystem that uses their tokens in a number of ways. They may provide customized rewards, unique content, and opportunities for fans to interact with them, all while maintaining full ownership of their communities.
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