After the arrival of the blockchain and the cryptocurrencies, a “crypto-collectible” NFT also arrived that has been gaining space among artists, game developers and other professionals who deal with copyright
What is NFT
NFT is a kind of digital certificate, established via blockchain, which defines originality and exclusivity to digital goods. Acronym for “Non-fungible Token”, NFTs have attracted attention after millionaire sums have been used to buy this type of asset on the Internet.
Fungible assets are exchangeable and have no exclusivity. For example: you can exchange a note of R $ 100 for two of R $ 50 and it will continue to have the same value. But a ticket for the 2022 Football World Cup final could not be exchanged, as the seats are marked, unique and issued to that buyer. This second is a typical case of an infungible or non-fungible asset, as there is no possibility of substitution.
How does NFT work?
NFT is a digital stamp associated with an item that guarantees its authenticity. … Each image is associated with an NFT, which they register and put up for sale. The buyer becomes the sole owner of the image. Before detailing the technology, the first step is to understand why someone wants to own a digital work
What is an NFT contract?
It is a digital asset that has a unique signature inserted in the blockchain, a kind of virtual record book. When a digital item becomes associated with an NFT, it gains authenticity status
What is the advantage of buying NFT?
The advantage of this format is that the NFT can always be linked to the original creator or owner. If a buyer decides to resell the work, the artist responsible for it may receive a portion of the amount (provided the transaction is made on the same platform as the original sale).
Non-fungible tokens are used to create verifiable digital scarcity, as well as digital property and the possibility of interoperability of assets across multiple platforms. NFTs are used in a number of applications that require unique digital items, such as cryptographic art, crypto-collectibles and encrypted games.
Specific token standards have been created to support the use of blockchain in games. This includes the ERC-721 standard from CryptoKitties and the latest ERC-1155 standard.
- ERC-721 standard
- ERC721 was the first standard to represent non-fungible digital assets. ERC721 is an inheritable Solidity smart contract standard, which means that developers can easily create new ERC721-compliant contracts when importing them from the OpenZeppelin library.
- ERC-1155 Standard
- ERC1155 brings the idea of semifungibility to the universe of NFTs, as well as providing a superset of ERC721 functionality, which means that an ERC721 asset can be built using ERC1155.
Who uses NFT
Non-fungible tokens first became popular when CryptoKitties went viral and then raised an investment of $ 12.5 million. RareBits, a marketplace and exchange for NFTs, raised an investment of $ 6 million. Gamedex, a collectible card game platform made possible by the NFTs, raised an initial round of $ 800,000. Decentraland, a blockchain-based virtual world, raised $ 26 million in an initial coin offering, and had an internal savings of $ 20 million in September 2018. Nike holds the patent for its blockchain-based non-fungible tennis tokens, called ‘CryptoKicks’.
On May 12, 2021, the first physical crypto-art festival in Europe was born in Lisbon, “Rare Effect vol2 – an NFT Festival”
NFT usually uses the ERC-721 standard, which operates on the Ethereum network and is the most widely used and known, but also to other standards, such as Enjin’s ERC-1155, where it is more focused on video games.
For the NFT, Ethereum is fundamental because the encrypted key is stored in the Ethereum Blockchain (ETH), which supports the recording of extra information that differentiates an ETH (virtual currency) from an NFT (single asset).
Other advantages of NFT
The main advantage of the technology is the guarantee of authenticity, without this implying extra expenses or the need for a regulatory authority. However, the benefits of using NFT go beyond.
The reduction of bureaucracy in the purchase and sale of articles is a reflection of this. In the traditional model, if you buy a painting in France, you need to find a specialized carrier to bring you safely, arrange all the import paperwork and still pay the import fees to the IRS. With NFT, all of this is simplified, making it possible to establish only a direct agreement between buyer and seller.
Why buy NFT if I can get it for free?
However, for the world of art commerce, having the NFT of a work represents having ownership of that piece. And that gives you the right to do whatever you want with it, without the creator giving an opinion or questioning. In addition, there is the possibility of earning (a lot) money from the valorization of art or the explosion of the artist’s popularity.
We can put as an example playing the lottery, however, it is cheaper, safe and easy to win because it is not yet very popular as lottery tickets. An NFT bought today for a few cents can be sold in a few weeks for a few million dollars.
- NFTs are the future and I can help you even more to stay on top of that future and not be late, click on the link below to schedule a consultation with us.