What is an NFT?
The concept of a collectable has been around for hundreds of years. But let’s not go back that far. Even over the last 3 or 4 decades, collectables have been a big thing stretching from artwork to Pokemon cards to football stickers, Pogs, Magic Cards and even Marbles at one time.
The truth is, people like to collect. It is intertwined into the materialistic part of our brains and something we can not explain. We enjoy accumulating objects and items that are special, unique or rare. Maybe we think these items will go up in value; maybe we don’t care about this and just want to get our hands on them. The concept of collecting is something that many of us interpret in our own way, and there are no limits to what it can mean in reality.
What are NFTs?
Enter 2021. We live in the digital age with a new wave of collectable opportunities branded under the term Non-Fungible Tokens or NFTs as you may have commonly heard. A non-fungible item, simply put, means that the item in question is unique and non-substitutable. This is similar to an exclusive Pokemon card which is one of a kind or something of this sort.
NFT’s are digital assets that exist as records on a blockchain. The blockchain acts as a public ledger, allowing anyone anywhere to verify the authenticity of the NFT who owns it. NFTs can represent most things digital, including artwork, drawings, music, bits of content and more. They have been catapulted into the public domain in recent years because of the growth of the Ethereum blockchain and its underlying technology, which has powered their initial development.
Are NFTs exclusive to Ethereum?
No, not anymore. When the 1st generation of NFTs was initially rolled out, they were initially showcased on Ethereum and these included collections such as Cryptokitties and Cryptopunks to name a few. However, with the vast amount of blockchain exploration that has taken place since that time and with countless new networks available, NFTs are now available on multiple blockchain networks including Flow, Solana, ADA, and Binance Smart Chain to name a few.
Why are NFTs worth so much?
Today, the global NFT market value is currently estimated to stand at around $43 billion, with a daily trading volume of over $3 billion. How does this make sense, you may ask? Because as NFTs are digital assets, they can technically be replicated more than once, so why are they worth so much, and why are people going crazy about them? Yes, it is true that NFTs are digital, and they can be replicated indeed; however, in reality, only one person owns the digital rights to an NFT, making them the holder of the original asset. The fact that they can be replicated more than once is comparable in the art world when one buys a print of an original painting.
How do NFT’s benefit creators, consumers, and collectors?
For creators, the creation of NFT’s have created a digital environment of appreciation empowered by a totally new set of online marketplaces such as Open Sea and Rarible, to name a few, where artists can showcase their work and sell it in exchange of crypto in a more focussed environment. For example, suppose an artist comes up with a really cool idea for a digital sticker or emoji. In that case, they could sell this image independently on an NFT marketplace and potentially make much more for it rather than selling it to a 3rd party distributor.
For buyers, purchasing such assets allows them to directly support artists and creators rather than third parties. Moreover, as a buyer, you gain the rights to the NFT, a transaction which is recorded on the blockchain. This represents a symbol of true ownership over the work in question.
And finally, collectors can buy such assets with the hope that their value one day increases, allowing them to sell them for a profit at a later date.
What else are NFTs used for?
In addition to being used to represent digital art and content, NFTs are being explored heavily as assets in blockchain games and Metaverse based ecosystems. This new trend of blockchain gaming has allowed gamers worldwide to ‘play to earn’ and accumulate cryptocurrency tokens in turn for their efforts in the game. At the same time, NFTs are a big part of this world as they represent the technology that has tokenized digital items in blockchain games. Within such games, there have been a number of examples where virtual NFT assets have been traded for astronomical amounts of money. A notable and recent example of this was when a Metaverse Mega Yacht was bought in the game, “The Sandbox” for 149 Ether amounting to $650,000.
What does the future hold?
We think it’s fair to assume that NFTs will be a big part of the future where they will be rolled out as standard digital certification for both digital and physical products to record ownership, authenticity and provide trust to all parties. We also believe that with the mass exploration of the Metaverse and everything that comes along with it, including the streamlining of technologies such as AR and VR into blockchain games, NFTs are just at the beginning of their journey. In the future, they may well stretch to include even more variations of assets and items to what is available today.
About Reality Gaming Group
About Reality Gaming Group Reality Gaming Group is an award-winning developer and publisher of blockchain-based games, NFT digital collectables and bespoke marketplaces for global brands. Key releases via the Reality Studios publishing label include Doctor Who: Worlds Apart, Smighties Universe, Reality Clash and Emojibles. Reality Gaming Group’s Digital Asset Trading (DAT) Platform is also available for license by third parties, enabling the creation of fully-managed NFT experiences across multiple content types. The Reality Gaming Group leadership team has more than 20 years of experience across Mobile, PC, Console, AR and VR games. The company is listed as a Top 50 blockchain games publisher by industry bible BlockchainGamer.biz