What is NFT? How Is It Related to Metaverse and Gaming?
The advent of blockchain technology has been the biggest breakthrough in the history of the internet. It has revolutionized both- the social as well as financial dimensions of human life. Every day, we witness a new transformation, a new invention. We are unable to grasp more than half of these inventions and often keep wondering, “what exactly is going on?” For instance, today, NFTs or non-fungible tokens are all the rage in the world. But not many of us understand what is NFT and how it works.
NFTs are blockchain-based unique cryptographic assets that give you the ownership of digital assets such as art, music, videos, or any other collectible that can exist online. Each NFT Coin has a unique identification code and metadata. NFTs function just like information tokens. However, unlike cryptocurrencies, they are not mutually interchangeable as they are non-fungible. A non-fungible asset is one that cannot be substituted, divided, or exchanged.
What is NFT?
Non-fungible Tokens are nothing more than cryptographic assets on a blockchain. It comes with unique identification codes and metadata that make it impossible to replicate them. No 2 NFTs are the same. Therefore, they can not be exchanged or traded on the principles of equivalency. This makes them different from cryptocurrencies which are exact replicas of each other.
The uniqueness of each NFT makes them fit for representing ownership and identity of physical assets such as real estate properties and vehicles, therefore, digital extensions of real-world objects. Anything, whether it is a passport or a pair of sneakers can be converted into NFT tokens.
Each NFT token is unique and irreplaceable. They contain ownership details to facilitate easier identification and exchange. The owner of an NFT Token can also add unique attributes related to their assets in the form of metadata. For instance, an artist can add their signature to their NFT artwork.
Understanding the NFT Marketplace
NFTs have made the world go bananas and today, the NFT market stands at $3 billion. With more and more companies joining the race, the sector continues to grow at a CAGR of 35%. In the year 2021, the volume of NFT sales almost touched the $25 billion mark. This is because large MNCs like Facebook, Twitter, and Nike joined the NFT fever.
Nearly anything digital can be transformed into an NFT Token. From art pieces to tweets, literally, anything can be sold at the NFT market. For instance, Jack Dorsey, the founder of Twitter, sold one of his tweets for $3 million. Celebrities like Snoop Dogg and Shawn Mendes have also shown great interest in NFTs.
The most striking feature of the NFT tokens is that they provide digital representation for real-world physical objects such as artwork, real estate, etc. They are a great way to provide a direct connection between the artists and the consumers, thus, bypassing intermediaries.
NFT tokens provide a more effective method of transaction. They offer a safer market for buying, selling, and trading, reducing the chances of fraud. NFT coins can be used to establish an individual’s identity and ownership rights.
NFTs are an important step forward toward reinventing the financial landscape. They can enhance market efficiency by streamlining transactions and removing intermediaries. The fact that these assets are untamperable provides an excellent system of identity management.
How it Will Impact in Metaverse?
Ever since Facebook changed its name and announced that it is creating the biggest metaverse, the concept has become the talk of the town. Metaverse essentially is an overlap of the physical and virtual worlds. It is a kind of immersive reality that aims to establish a real-world human connection in the digital arena. In Web 3.0 world NFTs can play an important role.
The metaverse industry is expected to grow into an $800 billion market in the next couple of years. One of the biggest shareholders in the metaverse economy is the metaverse games. Metaverse games aim to provide a social experience to users. They leverage augmented reality to create story-driven games. Furthermore, they utilize NFT coins to make the games more interesting.
It can serve as a main pillar in the metaverse landscape. NFT is the key that can enable people to own digital assets such as cars, houses, boats, paintings, clothes, and practically everything else. NFT tokens have the potential to make the immersive reality more real. NFT coins can also serve as a way to provide VIP access to events in the metaverse.
Decoding NFT Art and How to Buy Them?
By now, it has been already established that the NFT marketplace offers a promising trading solution to artists. They no longer have to rely on exhibitions and auctions for selling their art. They can simply convert artworks into NFTs. By means of NFT art, artists can directly sell their work to consumers. They do not have to depend upon intermediaries.
Furthermore, there are many royalties programs available for NFT art. Therefore, an artist will receive a share of proceeds every time their art piece gets sold. Many brands such as Charmin and Taco Bell have been using NFT Art to raise funds for charity. Taco Bell’s NFT art got all sold out within a few minutes, with the highest bid placed at 1.5 wrapped ether. Looking at the success of these bids, more and more artists are now joining the NFT art bandwagon.
In order to buy an NFT art, you must first own a digital wallet where you can store your NFTs and digital currencies. You will also need to buy some cryptocurrency first. The choice of cryptocurrency depends upon what currency a given NFT art provider accepts. That’s it. You can start buying those amazing artworks.
What are NFT Games? Is GameFi an Actual Thing?
NFT games are quickly gaining popularity in the Game-Fi world. They are a good way to earn money. The play-to-earn games come with the option to sell your in-game NFTs to other players in exchange for tokens.
Ethereum Blockchain and Binance Smart Chain are the main platforms where you can play NFT games. Some of these games come with collectible collectors such as Axie Infinity, CryptoBlades, etc. The NFT Game-Fi also provides a unique battling experience.
These NFT games use tokens in establishing rules, managing player interactions, and setting game mechanics. There are also many in-game assets that you can collect while playing. These in-game NFTs are a great way to earn money. They take the Game-Fi NFTs to a whole new level.
Here’s how NFT games work. The game rewards a player with tokens and NFTs. The more time a player spends gaming, the more tokens and NFTs he/she earns. You can swap your collected NFTs for money or other digital assets with other players. To facilitate this trade, developers create smart contracts on the blockchain. You can say that crypto games work similarly to card trade games.
Game-fi has enabled the creation of new gaming economies that can transform the way people can earn using NFTs. These economies are important because of the rising popularity of NFT games as well as the metaverse games. What can we say? Making money is no longer a matter of luck. It depends on gaming too.
Relationship with Crypto
NFTs are a trending topic in the world of cryptocurrency. Even though the NFT marketplace is relatively new, it has still managed to capture the attention of investors, MNCs, innovators, and celebrities alike. There are continuous experiments in the NFT Crypto world, exploring the applications of digital tokens and smart contracts.
The Cryptos are risk assets that differ from stocks in the sense that a user does not have any quantifiable statistics on its intrinsic value or the market value. The value of crypto investments solely depends on how much the crypto community is willing to invest in them.
Along with their intrinsic value, investors also need to define the right level of exposure for NFT crypto assets. According to experts, It should be the subset of the exposure to their cryptocurrency assets. It all depends on how much money you are willing to put in your risk capital bucket.
One needs to keep in mind that NFTs are liquid assets as opposed to commodity assets. The key for making the most out of your NFT crypto investment is to understand the capability of your assets. NFTs offer great growth opportunities as they come with real-world utility. Therefore, NFT possess the potential to hold greater and long-term value in the near future. Overall, cryptos are a great way to diversify your investment portfolio.
How does NFT Trade work?
NFTs can only be purchased sold and traded with ether. Therefore, investing in this cryptocurrency is an important first step in stepping into the NFT Trade sphere. The next important thing to do is to set up a digital wallet to store your NFTs as well as cryptocurrency. MetaMask is the most popular digital wallet used to store cryptocurrency.
The next step in the process is to connect your digital wallet to the NFT marketplace such as OpenSea, Nifty Gateway, NBA Top Shot, etc. Depending upon the availability, you can start purchasing different kinds of collectibles and artworks from the NFT marketplace.
In order to make the final purchase, you would first need to fund your account. Since most NFT marketplaces operate on bids, you may need to first submit a bid. One big advantage of buying it from its primary marketplace is that right after the sale, its resale value can go up by 5 to 10 times the price of the sale.
It is important to understand here that unlike other trade units, NFTs do not derive their value from their utility. They have value because of the data attached to them. They represent a unique real-world asset.
Nonfungible tokens are quickly gaining popularity. With tech giants like Nike, Facebook, Twitter, etc. all launching their own NFTs, they have become everyone’s favorite. NFTs possess great potential for completely transforming the world.
Whether it is art, sports, or gaming, every sector is embracing NFTs. NFTs are basically digital extensions of physical assets. They, therefore provide a safe and secure way to trade as these assets are nonreplicable, untamperable and easy to exchange. NFTs are also a great way to establish ownership and identities by means of metadata. Stored on blockchain platforms such as Ethereum Blockchain, they completely remove intermediaries from transactions.
NFTs are very popular among artists as they offer them a place to sell their artwork in the form of NFT art. They no longer need to depend upon exhibitions and auctions to sell their work. Artists also enjoy royalties for their work.
In the gaming world too, NFT provide a good way to players to make money. In Metaverse games, a player can collect unique assets and can later exchange them with other players to gain profits. Game-fi is speculated to be the next big thing in the gaming industry. It has already started revolutionizing the digital space.