The world of NFTs: what does it mean?
Even though NFTs are getting more popular and recording huge transactions volume, many people still don’t know exactly how this world works and the revolutionary nature of it
Surfing on the web these days I’ve come to the same conclusion as many authors that dared to explain and talk Non-fungible tokens, or NFTs, have:
You should never start with its meaning.
Why? Because it only gets more confusing, distracting and, believe me, it’s not going to help you in any way.
So, let’s get to what it can do for your reality first - its use cases and implications in the society that we are living in right now - and perhaps even more importantly, what can become of it in the future.
Also, we can talk about the curiosities and fun facts. Way more interesting and practical, right?
Of course there’ll be some examples as well, but the aim here is to: give no more space for doubts regarding what NFTs are, what they can do for us and what is really going on that some people are “freaking out” about the entire NFT phenomenon.
Art for Art?
Do we make art for appreciation or for selling? Do we do it for others or do we do it for ourselves?
The answer for those questions doesn’t really matter, the point is: whether we want it or not, in the age of the internet, people can have it for free. Period.
By just clicking on the left button, ‘Save As’, and choosing the file directory, you can have a replica or photo of a million dollar piece of art for free. And then, if it is in high quality, you can print it and have it in your living room. There. You have yourself a Monet.
(Please note that this is only for example purposes. Do not fake a Monet. It’s lame).
So, on the internet we can have copies and copies of files, right? And because it’s that easy to multiply things online, those “pieces” lose value. They are extremely open and lose their worth.
But what if?
But what if there was a way to make a file exclusive, to make it utterly unique?
What if you could own something online that you alone (or other people that bought the right to the same thing) would be the verified owner of the asset?
I mean, it could get copied online, that’s for sure.
But never fear: in that case, it would be awesome for you! Because the more it gets popular, the more valuable the original would become on the market!
Because you - the owner of the asset - would have something that proves the original version is in your hands (better: in your digital gallery).
Well, let me present to you the NFT.
It is a digital code, like a copyright authentication, which verifies that a particular asset is original.
Actually, better said: it is a seal of authenticity.
But, the difference is that this seal comes in the form of a token and it’s hosted on the - ta-da - blockchain!
Blockchain is not only for crypto
Most of us already know this, but it’s very useful to remember: blockchains are not only for cryptocurrencies.
A lot of people make this automatic assumption that cryptos and blockchains are one in the same, but we know that blockchain is the technology through which the cryptocurrencies exist - their transactions are only possible because of the blockchain ecosystem.
So, of course once cryptos would be up and running, they would not be the only use for blockchain. Smart contracts and DeFi worlds are getting bigger as more solutions in the decentralized universe are articulated, developed and launched to the public.
One of those solutions is NFTs.
By using the blockchain technology (in which the user does not need an intermediary to conduct a transaction), assets like paintings, drawings, photos, fictional characters or even tweets (yes, tweets) could be shared and sold, artist to buyer, without any label, producer, law firm, gallery or whatever in the middle.
It made things easier for the artist, since they don’t need approval for their work to be out in the public nor even have to share their profits with anyone and to buyers as well because they deal directly with artists, avoiding intermediates that can make products more expensive.
But art (or a tweet) is not the only case!
NFTs will soon change how people access events.
Restaurants and the hospitality industry will benefit from NFTs too: a coupon, a discount, a gift card, an exclusive card, even a table at a restaurant can be an NFT.
Check this interview by Gary Vaynerchuck - CEO of Vaynermedia and NFT enthusiast and investor - where he talks about the first NFT restaurant:
Also, another interesting point is that you can be a part of a group of owners to a NFT.
Let’s take Bitcoin for example. You can have a fraction of the Bitcoin, right? It’s called a Satoshi, the smallest amount of Bitcoin. With NFTs, if you mint 10k total tokens for the supply, you can have 10k different NFTs from each other.
So, there are some projects splitting the NFTs propriety (10 owners for one NFT), but still, the NFT is unique, even if they have more than one owner.
Out in the real - or virtual - world
Still don’t believe that this is a hit?
Let’s go to real life examples. And we warn you: things can get crazy (and way valuable) really fast.
Arts (and not so much)
The first great impact with the possibilities of NFTs were for collectors of fine arts.
What if you didn’t have to actually store a masterpiece in order to own it? That seems like a pretty good deal.
One could possibly buy an NFT of a great painting (remember Monet?) and leave it in a safe space - such as a museum or a gallery - and still be the owner.
But things can get to the extreme opposite when it comes to masterpieces on NFTs.
As many think that the NFTs are most useful for collectors and similar fields, others just want to play it like a “gotta catch ‘em all” kind of thing.
Logan Paul (famous youtuber) sold as NFTs parts of a video clip that already exists on Youtube.
Yes, he did that and people bought it - for approximately $20,000.
If you are passionate about music as I am, you are waiting for more bands and music artists to come to this universe, right?
Obviously it’s something that is evolving with time. Not all the artists will drop into the NFT world from the sky. But they surely are coming.
For example, Mike Shinoda, from Linkin Park, already sold a song as NFT.
A platform called Audius just recently has closed a partnership with TikTok and their value escalated because of it. They have a token named AUDIO with which you can buy the songs that the artists uploaded there (as NFTs, of course) and also trade the token in the market.
Some of the artists that are in Audius are deadmau5, Diplo, Skrillex, and many more.
Here we have an interesting use case of NFTs for music (also for arts).
It's called creator royalties, and it's something that specialists believe that we will soon see happening in the mainstream market (it's already happening off-chain, inside centralized platforms like Foundation, Rarible, and others).
Felipe Rieger, Klever’s Head of NFT explained:
“There are some blockchains (including ETH) that have upgraded proposals in the network to include a connected wallet in the contract, in a way that the one who "mints" the NFT will always receive royalties for its transaction (also they are trying to make a case study of that use case).
Once this happens it will completely change the market. It will give power to artists and creators to directly monetize their work in a secure way through NFTs networks and receive royalties directly to their own wallets”.
The gaming world
This is where the true fever is.
The gaming world, where the NFTs can be tokens of characters or even valuable coins inside the game that allows you to make governance decisions about it, is boiling up with the NFT buzz.
The main reason that crypto gaming has exploded in the last months is because of the utility of these NFTs.
“The market has understood that the more "utility" a token has, the more valuable it will be. Also, the combination of 2 NFTs that mint a new "unique" NFT creates an increasing interest for this kind of NFT. Obviously, there are other factors to this gaming phenomenon like the play to earn incentives.”
-Felipe Rieger, Head of NFT | Klever
Of course, the most recent and distinguished example is ‘Axie Infinity’.
The game uses two tokens (Axie Infinity Shards - AXS - and Smooth Love Potions - SLP). The first one is related to governance decisions and the second is useful in the game for the characters.
The AXS’ value, for instance, has increased circa 14.000% since January of this year.
Watch this video to understand more the phenomenon of AXIES, and how this created a new "era" for the gaming industry:
And as people dig deeper for more inside the gaming world of NFTs, more exciting content is developed.
One example is the game Devikins, developed by MoonsLabs, which is incubated as part of Klever Labs, Klever’s in-house development entity.
Devikins is a turn-based RPG mixed with character breeding, all of it fueled by crypto tokens, used in lieu of non-valued game currency.
Each character is an NFT and the coin that is used in the Devikins world is the Devicoin (DVK). DVK is a cryptocurrency that may be exchanged with other cryptocurrencies in the real world and eventually will be exchanged using fiat currency.
And guess where you can purchase DVK?
So easy to purchase and, in my humble opinion, the most beautiful demons I’ve ever seen in my life!
I want to be in the revolution
Right, Maluh, but now I’m curious: where can I ‘shop’ for NFTs?
I knew you would be interested. Well, there’re many places now. Marketplaces are spreading since the NFT fever is out. The most famous is OpenSea but there are many more. One Google and it’s all good.
But, if I were you, I would pay attention to Klever’s announcements. Some say that we’ll have a NKT marketplace on Klever Exchange as well soon enough...
Also, the most famous NFTs networks in which they are traded until now are: Ethereum (ERC-721), Tron (TRC-721), Wax, Flow, Zilliqa, and many others.
Well, I think you get it now, right?
NFT is not that hard. Maybe it’s not so easy to imagine its applications in the real world with the majority of artistic works but we’ll get there soon enough.
One of these days we wouldn’t believe in streamings or emails.
As it is with many blockchain ideas and developments, it is revolutionary - and just for that, I wanna be a part of it.
(Oh! Almost forgot: NFT means Non-fungible tokens. Tokens that can’t be replaced for things of the same value, or in other words: unique. But you didn’t need that explanation anymore).
Keeping it Klever,
Klever Writer and Editor