NFT
NFTs are short for non-fungible tokens, which are smart acquisition contracts for digital assets. Those who buy and own these contracts are the owners of their assets, NFTs can be used to represent easily reproducible elements (videos, images, audio clips, and other types of digital files).
• The first NFT Quantum, was created by Kevin McCoy in May 2014 and then purchased by Anil Dash.
• In October 2015, the first NFT project, Etheria, was launched and showcased at DEVCON 1, the first Ethereum developer conference, in London, UK.
• In January 2018 awareness and interest in NFTs began when CryptoKitties, an online game where players adopt virtual cats and trade them. Shortly after its launch, the project went viral, raising an investment of $12.5 million.
•In March 2018 another NFT-based online game Axie Infinity was released, which then became the most expensive NFT collection in May 2021.
• In 2019, Nike patented a system called CryptoKicks that uses NFT to ensure the physical safety of sneakers and give a virtual version of the shoe to the customer.
• In early 2020, CryptoKitties developer, Dapper Labs, released the beta version of NBA TopShot, a project to sell premium collectibles to NBA flagships, later that year, the project went public and announced total sales of over $230 million as of February 28, 2021.
The NFT market grew rapidly in 2020, tripling its value to $250 million. In the first months of 2021, more than $200 million was spent on NFTs.
The importance of NFTs is that when you buy them, you not only get the digital work but you will be given ownership of the asset, which earns the NFTs their real value, as it contains features that attract you to invest in it.
Advantages of NFTs
1- Equity:
The codes of these tokens are included in the blockchain eternally, they are indivisible and cannot be distributed to more than one owner at the same time. This feature thus ensures that any concerns traders face about counterfeit codes are refuted.
2- Enhancing market efficiency:
We see a dazzling boom in art trading so that the artist is able to contact his audience directly without the need for agents or cumbersome deals, due to organized and cost-effective NFT deals with reliable proof of their authenticity.
3- Resale:
Many people invest in these tokens at a modest price and then resell them after acquiring them at a price that is (at least) three times higher than the purchase price.
4- Fixed:
It is impossible for its data to be changed, erased, or tampered with in its order, which gives it the advantage of “eternity” in the blockchain. This feature makes these symbols highly valuable, becoming a target for collectors from around the world.
Where to buy NFT?
There are several marketplaces where NFTs are sold, some of them are open to everyone and others have special requirements and invites. These markets facilitate investing in NFTs for both investors and artists.
As NFTs growing rapidly in recent years and create new interactions for artists and buyers many artists didn't understand what NFTs meant but they wanted to give it a shot because they observed NFTs gaining popularity in their community.
In the following, we will review some popular NFTS markets:
OpenSea: https://opensea.io/
The most well-known NFT marketplace, its popularity stems from its ease of use, and its unique feature that allows users to create their own NFTs. the platform contains a wide selection of digital content like digital arts, domain names, virtual worlds, music, photography, trading cards, and much more.
Axie Marketplace: https://app.axieinfinity.com/marketplace/
Axie Infinity is an industry leader in non-fungible token gaming, granting ownership and allowing users to exchange Axies for real money on the marketplace.
Larva Labs/ CrptoPunks: https://larvalabs.com/
A platform that is specified in collectable characters, a famous marketplace in this area, and its characters worth millions of dollars.
Most attractive NFTs deals
- In May 2014, the first NFT was a type of digital art called “Quantum” an Octagon shaped animation made by Kevin McCoy, which sold for more than $1,000,000.
- In September 2018, the cryptokitty -an online shop that allows players to own digital cats- sold its characters dragon for $ 170,000
- In December 2020, 5% of Monaco circuits sold in the F1 delta time game licensed by the F1 foundation for $222,000, this property will allow the owner to obtain real income from the participants in the arena representing 5% of the total income of the arena.
- In February 2021, NBA Top Shot-provide snapshots and digital cards that can be sold-a LeBron James moment from their cosmic series1 set collection for $208,000
The following illustration shows several well-known companies invested in NFTs that Believe in a bright future in this investment sector:
What are the areas of investment in NFTS so far?
1- Films
In May 2018, the company, Senchori Studios, made a partnership with ATOM TICKETS and issued a limited number of digital stickers to promote the film. In March 2021, Adam's documentary for 2015 became the first movie and auction documentary to be sold as NFT.
2- Music
3- Games
4-Digital Arts
5-Virtual worlds
The currency in which it is traded
The common currency used to acquire NFTs is Ethereum, which is equivalent to approximately $461, but it is not the only one, as there are several currencies that are used in trading.
How can NFTs generate income for investors?
The technology of non-fungible tokens (NFTs) has opened up a huge opportunity for artists, businesses, and everyone to invest assets. They are able to create a library of digital assets to market to a new wave of investors and collectors. Companies can create assets that benefit from their well-known brand identity.
In addition, some NFTs are sold in the millions and for huge sums, so some see it as a good opportunity to invest.
What drives investors to invest in it?
Investing in NFTs is open to all. Ownership of NFT token assets can be transferred from person to person anywhere more easily and efficiently, and the use of blockchain technology to digitally signify ownership can make ownership of assets safer for investors. Technology can also make asset ownership more transparent and visible, and this symbolizes security in investing in this area.
In conclusion, many investors see it as a global obsession that will likely take the bitcoin path, in the other hand, there have been significant developments and new markets in this sector, and now the sector's values have exceeded millions of dollars, but prices may reach the highest levels and cause an explosion in the price bubble, which a point investors might leave the field, but it remains as a successful way to protect the digital property of its owners through blockchain platforms.
Resources:
https://www.playtoearn.online/2021/02/23/lebron-nba-top-shot-moment-sold-for-208-000/
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https://soundcloud.com/user-525840366/nfts
https://www.prada.com/br/en/pradasphere/special-projects/2022/prada-timecapsule.html
Prepared By:
Noura AL Tamimi
May Alkowaileet
Munirah Alsalem