NFTs, short for Non-Fungible Tokens, are taking the world by storm. A lot of celebrities and well-known personalities are displaying their NFTs as their profile pictures on social media platforms.
Mainstream brands, such as Nike and Adidas, have entered the space.
With the growing popularity of NFTs, it is becoming very hard to ignore this rising popularity.
So, what exactly are NFTs? Are they important to the upcoming Web 3.0 iteration?
What Are NFTs?
NFT is short for Non-Fungible Token. They are crypto tokens that are unique. They represent a non-interchangeable set of metadata that is stored on a blockchain.
Some of the most popular examples are Ethereum and Bitcoin.
A single bitcoin is equivalent to a single bitcoin. Users are indifferent between the exact bitcoin they’re getting or buying.
Every NFT is uniquely identifiable. On almost every occasion, users will care about the exact NFT that they’re getting or buying.
Blockchains are digital ledgers that are decentralized and distributed. They’re made up of blocks of data that are chained together in chronological sequence.
Ethereum is the most commonly utilized blockchain for NFTs. People are beginning to see the rise of niche blockchains as well. This includes Ronin and Flow which are built with gaming and NFTs in mind.
The metadata for the NFTs is located in smart contracts that are stored in the blocks on a blockchain.
One common myth about NFTs is that the JPEG or image displayed that represents the NFT is stored on the blockchain.
Though that’s true for a minor handful of projects, most projects store the image on an external storage platform. The metadata on the blockchain contains the link to that photo.
The cost of storing a photo on the blockchain is very high because of the file size of the image. This makes it uneconomical for projects to be completely on-chain.
Can You Create an NFT?
There are many methods to build NFTs. You can do it with the help of systems or do it manually.
Rarible and OpenSea are some of the most common areas to help people create NFTs.
Beyond the technicalities of creating an NFT, one vital thing to think about is the blockchain you want to build your NFT. This includes Polygon, Avalanche, Solana, Ethereum, and more.
Various blockchains have various trade-offs and communities that can have a huge influence on the success of your project.
OpenSea has an excellent guide on how to create your NFTs easily on Ethereum using their platform.
How to Purchase an NFT?
The biggest marketplace is OpenSea in terms of transaction volume. There’s a huge possibility that it’s where your NFT journey starts.
Though most well-known NFT collections are available in the Ethereum blockchain, there are also other NFT choices available in other Blockchain networks. This includes Polygon, Terra, and Solana.
Other well-known marketplaces are Rarible and LooksRare for Polygon/Ethereum, Random Earth for Terra, and Solanart and Magic Eden for Solana.
You’ll have to set up a crypto wallet. It should be compatible with the blockchain that the NFT project is built on to interact with the marketplaces.
The most commonly utilized wallets are Terra Station for Terra, Phantom for Solana, and MetaMask for Ethereum.
Once you set up your wallet, transfer LUNA/SOL/ETH to the wallet from a centralized exchange of your choice and you are good to go.
How Can NFTs Affect the World of Web 3.0
In 2021, NFTs took the world by storm. It brought forth a digital art revolution while becoming one of the fastest-growing asset classes of the year.
The technology of NFTs has allowed artists to provide digital originals without depending on middlemen. In addition to that, they also get royalties on secondary sales of their work.
However, it’s simply the beginning of the functionality of NFTs brought to Web 3.0.
The graphic sponsored by NFT.com highlights the evolving utility of NFTs, and how they’re already laying the foundations for ownership and identity in the Metaverse, allowing tradable and unique game assets, and building communities.
A popular brand “Nike” has already begun working on the app and expansion of the use of NFTs. However, there is still a lot more to explore when it comes to the use of NFTs.
The applications are endless, especially since web 3.0 serves as an interact, write, and read. Web 3.0 houses a couple of layers of technical innovation that include features like:
- AI
- Machine learning
- Blockchain
- Edge computing
- Decentralization
There is a compilation of advanced computing aspects that are distributed among cars, appliances, phones, sensors, and laptops.
How NFTs are Revolutionizing Digital Ownership Nowadays
NFTs offer complete proof of ownership and history for digital assets or any other asset that’s represented by an NFT.
This feature allows the creation of unique digital assets and items that any person can freely sell or purchase on an open marketplace.
Nowadays, NFTs have already evolved to offer further utility throughout a range of industries. This includes:
- Ownership of your assets and username in the Metaverse
- Tradable game assets
- Keys to digital communities
As the online world shifts from Web 2.0 to Web 3.0, NFTs are establishing the foundations of digital assets, economies, and communities.
Aside from wallet addresses and usernames, NFTs are becoming the foundational technology for assets in the metaverse.
The Sandbox, a Metaverse project, is already utilizing NFTs to represent digital land, décor, and furniture for virtual spaces.
Conclusion
NFTs offer people a way to leverage the benefits of both the digital and physical world to create fresh and ideal financial models and channels specifically intended for builders.
The current integration of technology is not perfect. It is still limited. However, that doesn’t take away from future use cases and the long-term potential that will arise in time to come.