not only music and paintings are considered NFT collectibles. An extended surge in NFTs, such as game props, ownership of virtual land, even a tweet, a pair of crypto socks, a collection of ordinary, digital rocks, and 52-minute fart audio, etc., magically shot to sky-high prices. For a time, the run-up in sales price renders NFT as an enormous pool of wealth, swarming with people from all walks of life.
What is an NFT?
The NFT or “non-fungible token”, a digital asset based on blockchain technology, is unique and indivisible with exclusive ownership. It is the opposite of the FT or the “fungible token”. A fungible token is a token replaceable with another one identical to it and can be split into smaller units, such as BTC, ETH, paper money, etc..
In contrast with the FT, non-fungible tokens represent the opposite concept. Each NFT has a unique, non-transferable identity, whose trading value rests in its scarcity.
How did it come about?
In 2012, the appearance of Colored Coin demonstrated the feasibility and potential for putting real-world assets on the blockchain. But before 2017, everyone in the blockchain industry was busy issuing fungible tokens, while the attempt on the NFT release found no taker.
In 2017, Matt Hall and John Watkinson, founders of a software company called Larva Labs, created a software program that could generate thousands of different characters, the prototype for CryptoPunks. Although the founders tweaked the Punks many a time and gave them different accessory combinations, few people were interested at first. In promoting the project, 10,000 Punks were released: the founders kept 1,000 and the rest were issued for free. The Punks ran out immediately, but to everyone’s surprise, it set off a boom in the secondary market later on. Now the price of these ugly-looking CryptoPunks has risen to breathtaking levels, and even the lowest-priced could cost more than $200,000.
After the unexpected prosperity of CryptoPunks, the Ethereum network launched the ERC721 protocol to issue, create, and identify this “unique token”. With this protocol, CryptoKitties, the first large NFT project, was born on the Ethereum chain. It is a blockchain virtual game where players can adopt, feed and trade virtual cats. The most popular feature of this game is the rarity of the CryptoKitties’ appearance and personality arising from gene pairing and breeding.
So, why is NFT all the rage?
- Taking advantage of the run
Following the COVID-19 outbreak in 2020, lots of funds, driven by the need to fight inflation, flood into the digital currency sector. Coupled with the coming Bitcoin halving in 2020, a big jump was seen in the cryptocurrency market. It is a law that segments will rise along with the soaring leaders. The bull run contributed to many big earners, who are motivated to make novel investments with their pockets being full. Moreover, when the market is still on the rise, participants always remain optimistic.
Seeing the unexpected premiums in NFT trading, plenty of investors “fear to miss the opportunity”.
- NFT enables more “economic” application scenarios
There will be no followers when “no money can be made”. Two years ago, many of NFT’s application scenarios were imaginary, and they could not create wealth. But the Metaverse and GameFi craze made NFT profitable.
Humans are going digital. Metaverse, the next generation of computing platforms and content media, is considered the virtual world humans will ultimately embrace. As 5G, VR, and other technological upgrades are involved, it will surely bring about changes in business models in the fields of gaming, social, content, and consumption. The iteration of the carrier for each field may bring along profit-making opportunities. That is why countless companies are investing heavily to explore it. Instead of hype and bubble, the participants are Internet giants that are making great fortunes in the Internet revolution, like Facebook and Tencent. No one can know better how important it is to capture the dividends of the era. NFT is seen as the infrastructure of the future economy.
NFT is a must for Metaverse to virtually map the real world, to be specific, to identify such different elements as identity, friends, immersion, low latency, diversity, anytime & anywhere, economic system and civilization, and information pass and creates a big opening for NFT developer jobs
