What are NFTs? – Investment nowadays is getting more interesting, there are lots of new investment assets that have sprung up, one of which is the Non-Fungible Token asset or commonly known as the NFT. The presence of NFT itself has attracted a lot of attention from various groups of people in Indonesia, such as big investors, crypto lovers, art collectors, and even game fans.
NFT is basically a digital asset that is in a blockchain technology network. Recently, NFT has been hotly discussed in the crypto world, this is because NFT has succeeded in providing very high profits to artists, creators, musicians, and influencers. Their work, which had previously been converted into digital assets, succeeded in getting investors interested and they did not hesitate to buy these assets in the form of NFTs at very fantastic prices.
In short, NFT can be understood as a piece of digital asset content related to the blockchain. NFT itself is the latest innovation of maximizing the use of blockchain networks on ethereum and bitcoin and others. This is the main reason why NFTs can be worth up to tens of millions of US dollars. So, to understand more about NFTs and how they differ from other crypto assets, here is an explanation about NFTs and other crypto assets.
A. Know Non-Fungible Token (NFT)
The increasing popularity of various game industries and digital artworks has given rise to many new innovations in the world of technology. This is also supported by the increasing number of people connected by using the internet. Some of the progress that has been successfully achieved has resulted in a lot of data spreading that is getting out of control, one of which is the distribution and transaction of digital assets.
When plunging into cyberspace, sometimes many people feel confused in determining which is the original work and which is the result of duplication or duplication. Although many people can easily plagiarize works of art on the internet, works that have been produced in digital form can have intellectual property that will be protected. In overcoming this problem, Non-Fungible Token is present as a digital token or crypto asset that is founded on a blockchain technology network.
The keyword in the name NFT itself is Non-Fungible, the two words come from the terms Fungible and Token. Fungible can be interpreted as an asset’s ability to be exchanged with similar assets that have the same value. This can be analogized to when someone wants to exchange a Rp. 100,000 banknote for five banknotes worth Rp. 50,000. So the two banknotes in concept have the same value. Meanwhile, a token can be interpreted as a digital asset that can be used to represent goods, services, to various objects that have value.
In simple terms, NFT has almost the same function as a certificate of authenticity that is exclusively owned by someone in the real world. Information on these assets will also be shown about who the initial owner, final owner, to the issuer of the token or digital asset are. NFT assets have a different form from Bitcoin or other crypto assets, this type of crypto asset can be classified as a unique asset because each NFT has a different value according to the value given by the buyer. This uniqueness ultimately makes NFTs unable to be exchanged with other cryptocurrencies.
In 2017, many people began to recognize NFT due to the release of an NFT game called Crypto Kitties. Crypto Kitties is the first game to stand on the Ethereum blockchain network. By using the Crypto Kitties game, users can adopt, raise, and trade cats digitally or virtually. After that success, starting at the end of January 2021, NFTs are back in popularity and can grow so fast that they are able to attract many people into the world of crypto.
In 2021 until now, NFT has grown very rapidly and has become a medium for many people’s digital collections. NFT has succeeded in becoming a new solution or method that can support artists, such as artists, musicians, and athletes. With the development of blockchain with NFT, artists no longer need to market their works through third parties. Even though it is already very popular in the community, NFT is still very limited for a number of industries such as arts, hobbies, and entertainment.
NFT can be said to be an asset that has enormous potential in the future. As an asset that develops from the cryptocurrency system, NFT has a purpose, form, and method of use that is different from other crypto assets.
This is the reason why the process of selling a crypto asset called Non-Fungible Token is carried out using an auction system. If you want to register a product as a digital asset, the Non-Fungible Token itself includes images, music, videos, games, and even electronic books.
B. NFTs in the Art Industry
The emergence of NFTs, which have very unique characteristics, has become material for re-evaluating the digital arts sector so far. NFT offers the security required by works when they are published in digital form. So far, the highly advanced development of the internet has not been able to guarantee that a published work of art will not be duplicated by other people. NFTs have succeeded in providing guarantees to artists so that they are able to make a profit.
NFT technology that uses a blockchain-based system has succeeded in providing guarantees for artists’ works of art for their property rights. This innovation has helped artists fight against plagiarism and theft of creative ideas. In addition, the smart contract system that exists in NFTs makes artists feel more secure because they can write down the percentage of royalties when the work of art changes hands.
At this time, NFTs in the art industry have reached a record price tag. The most expensive digital artwork is currently still held by Beeple through a work of art entitled Everydays – The First 5000 Days. This NFT, which sold in March 2021, managed to reach a price of $ 69 million dollars. This success has proven that there is opportunity for NFT assets as well as physical works of art that are sold through exhibitions.
C. NFT in a Business Context
1. Property Certificates, Assets, and Licenses
NFT in its use can be used to link physical assets such as proof of house ownership to proof of other property ownership. NFTs can be a safer place to store physical property ownership deeds by utilizing a blockchain system that has a very fast verification process. Users don’t need to worry if valuable certificates are lost or stolen, the security provided by blockchain is able to protect valuable certificate ownership data.
It’s just that, the application and development of NFTs as a place to store valuable assets or certificates is still not much done. However, seeing the potential that NFT provides, it makes the future of securing valuable assets easy to use.
2. Ticketing and Membership Industry
Until now, there are still many problems found in the ticket industry. The problem that most often occurs is that many brokers buy tickets in large quantities and then resell them at a higher price. Furthermore, a problem that is no less often encountered is fraud by brokers or various ticket sales services that sell duplicated tickets.
In an effort to support the optimization of the ticket industry, the NFT concept can be a solution to overcome these two problems. With NFT, ticket sales can be done more quickly and safely by using a verification and identification system that is not easy to change.
Apart from overcoming problems in the ticketing industry, NFT can also provide innovation to manage membership or membership with a digital system. NFTs can be part of digitally identifying proof of a person’s membership. This can be very beneficial for members because they don’t need to be afraid if their data is lost, changed, or used by others.
The company that has used NFT as proof of membership card is Kraken Kraton. The ticket company has registered the five drawings into an NFT and is giving its members a lifetime discount or a special discount coupon.
3. Sports and Fashion Industry
The first use of NFT in the sports industry was marked by the creation of collectible cards from the NBA Top Shot. The existence of collection cards from NBA Top Shot allows basketball lovers to create a collection of important footage from the matches they watch. Not only that, the expansion of NFT in the world of sports was also followed by the Belgian Football League and Jupiler Pro League, which collaborated with game companies Ubisoft and Sorare to make a fantasy soccer game using NFT.
In 2019, NFT was increasingly trusted in the sports industry when a sports company from the United States, Nike, made a patent with the Crypto Kicks authentication system. The patent rights carried out by Nike mean that loyal purchases of special shoes will result in NFTs accompanied by complete information such as the shoe material, where it was made, and various other unique things. Crypto Kicks owners can also make design modifications to some shoes in their digital form into a new pair of shoes that can be purchased physically in the real world.
D. NFT In Hobbyist and Entertainment Industry
The existence of NFT has succeeded in creating a very potential market for conducting transactions for various collectibles. Currently, NFT is increasingly dominated by many items that have the main function as collectibles.
As many have mentioned above, some of the collectibles that many people are hunting for are NFTs from NBA Top SHot, virtual cats from Crypto Kitties, to many unique avatars from Crypto Punks. The three types of NFTs have become collectibles that have prices reaching millions of United States dollars.
2. NFT Games
The game industry that uses the NFT system and blockchain can be said to be a sector that has enormous potential in the crypto world. This potential can be seen from the development of NFT games such as Crypto Kitties and Axie Infinity which are very popular in the world community. In the Crypto Kitties game, users are given the task of collecting, caring for, and breeding digital cats.
While the game Axie Infinity actually has a concept that is almost the same as Crypto Kitties, the difference is that Axie Infinity users have to collect NFT-based digital pets called Axies. Later, the user’s Axies must fight against other users’ Axies. Many NFT games use a pay-to-earn scheme, this scheme makes you have to play the game if you want to get benefits in the form of tokens or NFTs.
Axie Infinity and Crypto Kitties were built using the same blockchain network, namely Ethereum. In the game Axie Infinity, there are two tokens that have the ERC-20 standard. That means one can earn money by playing NFT games. A user who plays NFT games and earns SLP tokens or AXS tokens can exchange them for a number of other crypto assets.
This is the reason why there are many job vacancies for playing NFT games. The reason is, playing NFT games has proven to be very profitable. If users get tokens, they can exchange them for other crypto assets. Some people also have the opinion that NFT games are an investment and can be used to meet the needs of human life.
E. List of NFT Coins by Market Cap
1. Axie Infinity (AXS)
Axie infinity is a game that stands on a blockchain technology network that combines elements of NFT, DeFi, and games. This game was actually created and inspired by two famous games namely Pokemon and Tamagotchi. Almost the same as Pokemon and Tamagotchi, players will be given the task of collecting, caring for, breeding, and fighting with other players. Not only that, players can also trade their creatures named Axies. Each Axies is actually an NFT and comes with a variety of unique attributes.
Until now, when seen on Coinmarketcap, Aixe Infinity as a coin with the code AXS is able to collect a market capitalization of $ 5.70 billion dollars with a value of $ 93.69 per coin. In addition, Axie Infinity also occupies the first position in the category of NFT transactions worldwide.
2. Tezos (XTZ)
Tezos itself is one of the many cryptocurrencies that are in the blockchain technology network using a proof-of-stake (PoS) system. In addition, Tezos is also equipped with a smart contract program like Ethereum. This allowed Tezos to create its own DeFi ecosystem and DApps.
The Tezos ecosystem has a large enough capacity, thanks to the PoS system which makes transactions with Tezos much cheaper than transactions on Ethereum. Currently, the market cap of Tezos according to Coinmarketcap has touched $4.07 billion dollars and each coin has a price value of $4.66 dollars. XTZ is currently in fourth place in the NFT category by Coinmarketcap.
3. The Sandbox (SAND)
The Sandbox or can be called by its code, namely SAND is a game based on the blockchain network. This game was created to maximize the benefits of using NFTs in a wide variety of game assets. In the Sandbox ecosystem, users can play and interact with thousands of other players in a new real world called the metaverse.
The Sandbox actually has done a lot of cooperation with various big companies around the world such as Atari and also the well-known metal band Avenged Sevenfold. Currently, the SAND token on Coinmarketcap has reached a market capitalization of $5.116 billion dollars with a price per coin SAND has a value of $5.57 dollars. In NFT competition, the Sandbox is currently in 8th place in the NFT transaction category on Coinmarketcap.
F. How to Buy and Sell NFTs
For users who want to buy and sell NFTs, there are lots of marketplaces that provide these services. Many digital markets offer NFTs in various forms. The crypto assets that users want to use to buy NFTs can also be adjusted to the chosen platform, for example, CryptoPUnk, Opensea, to Rarible. The three NFT marketplace platforms can only accept payments using Dollars and ETH. On the other hand, sites like NBA Top Shot allow users the freedom to make payments for various types of crypto assets.