Binance, with the recent announcement of the world’s largest cryptocurrency exchange that it will launch a global market for NFT in early June, is worth calling it the “elephant in the house”: but what are NFTs anyway? ?
NFT literally means “non-fungible token” – “tokenized” and collectible item whose value is unique and rare, popular in Binance Smart Chain (BSC) and Ethereum. The value of NFT lies in their authenticity and lack, so it is useful to look closely at the token in a “blockchain explorer”.
NFTs have more usage than just “crypto art” and BSC now offers a non-fungible token ecosystem – and, starting in June, a dedicated marketplace for NFT. Given the recent popularity of NFTs in the media and their huge sales, it is easy to find a match with the big boom of the 2017 Cryptocurrency Initial Offering (ICO). But those are very different things.
To better understand, in this article, we will cover the basics of NFT based on the most common misconceptions and the most frequently asked questions.
When it comes to non-fungible tokens (NFTs), artwork and collectibles are never far off. These unique tokens are rocking the market by selling media to graphic designers and visual artists. Mike Winkelman, better known by his stage name “Bipal”, is a prime example: in March of this year he sold an NFT for $ 69 million through Christie’s.
NFTs are very popular, but this topic has surpassed the headlines For those who want to go further, understanding and exploring the world of NFT is the next step. We will then explain the seven essential points about NFT one by one:
1. What is an NFT?
An NFT is a cryptographic asset (“cryptoasset”) that presents something unique and collectible using blockchain technology. NFT may be in demand because it is composed by a famous artist or composed by a world-renowned musician The token can also be used in a video game or searched to complete a given collection.
You’ve already heard of the NBA Top Shot collection of digital basketball cards. Stickers act like their physically collectible replicas, but their authenticity is confirmed by blockchain technology. And, like paper trading cards, some are rarer and others have different values.
Simply put, a non-fungible token cannot be forged or copied. If we look at the definition of a fungus, we can begin to understand a little better what makes an NFT special: a fungus is “something that can be replaced by the same type, the same quality or quantity”.
In this context, we must remember that one bitcoin is equal and transferable to another bitcoin. A digital chrome “# 1/99 Caldon Johnson hollow icon top shot” is not interchangeable, as there is only one.
2. What can I do with an NFT? Are they subject to negotiation?
NFTs can use different shapes, sizes or even cases. NFTs in the pure collectible digital industry are quite limited in terms of what we can do with them. We can trade them, of course, but an NFT of a photograph, for example, is not very different from a regular photograph in terms of utility.
However, there are some interesting uses of NFT in video games, such as in the case of the famous CryptoKitties on the Ethereum blockchain (at a time when many heard of NFT …), in this case, a collectible “cat” could “breed”. From transmitting its characteristic features to new cats.
Financial platforms also regularly use NFTs. Artistic PancakeSwap has a huge market for NFTs and cryptocurrency convertibles. This unique combination means that people can guess about its future value.
The common denominator between all these NFTs is their ability to transact and exchange for different digital assets. That is, we can buy or sell NFT with Bitcoin and other cryptocurrencies. However, each part of the NFT is, by definition, unique – that is, it cannot be exchanged for another.
3. How is NFT rarity determined?
Determining the value of an NFT depends on what it represents. When it comes to the cryptographic industry, it’s quite similar to any other type of industry. We need to think about who made it, the artistic value of the piece, and how it might interest other collectors.
If an NFT is part of a series or limited series, then certain numbers are often more valuable than others. We usually see the number # 1 as desirable and people consider other numbers as collectible, such as # 13 or # 7. Quality and rarity depend on a combination of the factors mentioned above.
For game-based NFT, there may be financial benefits from specific NFT items or animals. If they give you a 100 reward, it will be worth at least 100, regardless of the artistic value.
Pancake swap NFTs are a bit different. Some of your tokens can be converted to CAKE – the platform’s cryptocurrency. So, for example, if your digital rabbit gives you 10 CAKE and the CAKE price is 20 (USD) per token, then your NFT would be worth at least $ 200.
4. Where can we get NFTs?
If you want to explore the world of NFT, there are several places you can start exploring. The NFT Marketplace has a wide variety of non-fungible tokens for sale from both famous artists and amateurs. There are plenty of options to choose from for Treasureland or BakerySwap for openness (for Ethereum-based NFT) and Binance smart chains.
As the number of marketplaces continues to grow, some become more specialized than others. If you are interested in buying something produced by a famous artist, make sure that the marketplace where NFT is for sale is genuine. You can find NFTs while participating in blockchain games or DeFi (“decentralized money”) projects.
Binance announced this week that, starting June 2021, it will launch its own NFTs marketplace.
5. Are NFTs the new ICO?
In a word, no – although there are similarities, the money raised through NFT and their recent popularity, they stop there. An ICO (Initial Currency Offer) [cripto]Currency) is a method used to launch a project by selling project tokens. ICOs became popular in 2017 but became embroiled in controversy due to the number of scandals and failed projects.
It’s easy to see why some people think NFTs are like ICOs. Recently, this digital collection has sold millions of dollars. NFTs have also received media attention as an opportunity to make “easy money” through cryptocurrency.
But these two points are the only ones where we can find similarities. However, it is important to do your own due diligence before taking the risk of investing in NFT, as not all projects are valid.
6. How can we verify the authenticity of an NFT?
Depending on what you are looking for, it may be a little difficult to validate your NFT. There is no doubt that people are uploading works of their own to other artists. In this case, you need to contact the original artist to make sure they are selling their own work NFT.
The creator of an NFT must prove to the buyer that it is an original article and that it is composed. Most of the work involves testing your NFT in “Blockchain Explorer” like BscScan. As far as blockchain is concerned, the procedure should be “don’t believe, verify”.
Useful information may include “Minting” dates (minting date) And the address of the digital wallet that NFT created. You can use the transaction history ID to verify the NFT. This is a better way than just checking your collectible pictures or files.
If we look at the recent Beeple artist sales mentioned above, Christie’s, which was auctioned off by NFT, was in possession of, for legalization, Token ID, Token Agreement and Wallet Address.
Sometimes the file contains a URL or an IPFS link to verify the underlying content. Both, however, can be used by someone else when creating a fake token. In most cases, it is best to verify the authenticity with the author.
7. How will NFT develop?
As far as NFTs are concerned, new development and usage situations are constantly emerging. It’s easy to forget that the technology was only born in 2017 and still exists in its infancy.
Before you start investing in these tokens, make sure you understand exactly what you are doing and how you can use them. We can think of NFT as just an industry, but there is a whole world of projects still being explored in different ways.