Our Guide to NFTs (Non-fungible Tokens) and Crypto Collectibles
The concept of trustless and digital scarcity got introduced with Bitcoin’sBitcoin’s creation. Before that, there was no price in having something replicated in the digital world. Due to blockchain technology, it has now become possible to have digital programmable scarcity that people are using it to have the digital world mapped out to the real world.
Also called the crypto-collectibles, the NFTs or non-fungible tokens were able to use this thought to expand. They are not like cryptocurrencies, as every token is equally created. NFTs or non-fungible tokens come in a limited quantity making each of them unique.
In the new digital economy that is powered by blockchain, NFTs are among the vital blocks for building. Some projects experiment with NFTs for numerous use cases like fine art, licensing, certificates, digital identity, and gaming. Aside from that, it allows for items of high value to have fractional ownership.
Since it is easier to have NFTs issued, each day, you can create more and more of the new kinds of assets each day. Here, we’ll discuss what the NFTs are, what you can use them for, including how the CryptoKitties game was able to congest the blockchain Ethereum last 2017.
What is the NFT or non-fungible token?
The NFT or non-fungible token is a kind of cryptographic token on the blockchain. A unique asset is what it represents that can be the real-world assets’ tokenized versions or assets that are entirely digital. Since it cannot be possible to have NFTs interchanged with one another, they may function as proof of ownership or authenticity in the digital realm.
Fungibility is defined as the individual units of an asset that can essentially be indistinguishable and interchangeable. For example, fiat currencies can be fungible because every unit can get interchanged with any particular unit equivalent. You can have a ten-dollar bill interchanged with another actual ten-dollar bill. For an asset to act as an exchange medium, this can be essential.
For currency, their desirable property is fungibility as it allows for free exchange. According to theory, there may be no way to become aware of every individual unit’s history. Yet, for collectible goods, this may not be a good trait. What if you can instead make digital assets similar to Bitcoin but have a unique identifier included in every unit? With this, each would become different from every other unit, like the non-fungible ones allowing this to be essentially what an NFT is.
What can NFTs be used for?
DApps or decentralized applications use NFTs to issue crypto-collectibles and other unique digital items. These are tokens that may either be an investment product, a collectible, or anything else. The economy of gaming may not be new as there are many online games with economies of their own. With blockchain, you can take a further step in tokenizing gaming assets. In reality, the NFTs and their use have the potential to mitigate or solve inflation wi=hich is a common problem that people experience from most of the games.
As virtual worlds have now been flourishing, real-world assets’ tokenization is another excellent way to use NFTs. NFTs can have fractions of assets in the real world represented. They can have them traded and stored as blockchain tokens that could introduce the liquidity needed in many markets that wouldn’t have that much otherwise. These are rare collectibles, real estate, fine art, and so much more.
Here is the sector that can surely benefit from the NFTs and their properties. As ownership information and identification gets stored in the blockchain, it can increase the integrity of data and privacy for many people worldwide. Aside from that, these assets can have trustless and easy transfers that can help in minimizing the global economy’s friction.
How do NFTs work?
NFTs come with different frameworks for issuance and creation. ERC-721 is among the most prominent, and it is the standard for issuing and trading NFTs on the blockchain Ethereum. The recently improved standard is ERC-1155 that allows a single contract to have both non-fungible and fungible tokens that can open up possibilities in an extensive range. The standardization of the NFTs issuance allowed for interoperability at a higher degree that can ultimately become beneficial to the users. It means that you can have unique assets transferred with relative ease between various applications. If you want to have your NFTs’’ beauty stored and gazed upon, you can use the TrustWallet for this. Similar to the other blockchain tokens, your NFT will exist on an address. Take note that you can’t transfer or replicate NFTs without the permission of the owner or the issuer of the NFT.
You can have NFTs traded in open marketplaces like the OpenSea. In these markets, sellers connect with the buyers, and every token has a unique value. NFTs can naturally become prone to price changes because of the market’s supply and demand.
Now how can there be value in these things? Like any item of value, the value may not be inherent to the object as it can instead be assigned by those who consider it valuable. Value is essentially a shared belief. It won’t matter if it’s a car, precious metals, or fiat money, as these things possess value based on what people believe they have. Through this, every valuable item gets its value applied to digital collectibles.
The Story of CryptoKitties and Ethereum
Among the first NFT projects that were able to gain so much traction was the CryptoKitties. It is a game built on Ethereum and lets the players exchange, collect, and breed virtual cats.
Every CryptoKitty may be with a combination of various properties like color, age, or breed. Because of that, every one of them can be unique that you can have them interchanged with one another. Aside from that, they are also indivisible, so it may not be possible to have a CryptoKitty token divided into divisible parts like ether’s gwei.
There has been notoriety that the CryptoKitties gained after they congested the blockchain Ethereum because of too much activity that made the network stir up. Last February 2020, during the height of popularity of CryptoKitties, was the ATH or All-Time High for the amount of the daily transactions on the blockchain Ethereum. It has been clear that the game was able to cause a significant impact on the network Ethereum. However, other factors could contribute to it, including the boom in ICO or Initial Coin Offering.
Since it became a controversial topic, the CryptoKitties became an early example of how entertaining the earlier example of use case in the blockchain is not a currency but something people use for leisure and recreation. These virtual cats collectively moved millions of dollars as there have been rare units that each got sold for around hundreds of thousands of dollars.
Famous Projects that Use Crypto Collectibles and NFTs
Nowadays, there are so many various projects that are using NFTs as tradable and collectible items. Here are the most popular ones:
The Austrian Postal Service was the one who issued the Crypto Stamps so they can have a real-world connection to the digital world. However, you can also have digital images saved on the blockchain Ethereum to turn them into a digital collectible that you can trade.
The digital collectible card game wherein cards get issued as the blockchain’s NFTs is God’sGod’s Unchained. Since every digital card can be unique, the players can have them owned and traded with ownership at a similar level as the physical cards.
My Crypto Heroes
The multiplayer RPG or role-playing game My Crypto Heroes lets players have historical heroes leveled up through battles and quests. The Ethereum blockchain is where the in-game items and heroes are issued.
The decentralized world of virtual reality is Decentraland. Here, players can become owners of virtual land to have pieces of it exchanged with other NFT items in the game. In the match Cryptovoxels, players can have a virtual property built, developed, and exchanged.
NFTs that are issued on special occasions given as a collaboration between Enjin and Binance are Binance Collectibles. Whenever you want to get one, make sure that you are following Binance on Twitter to check out their giveaways!
How NFTs Revolutionize the Filipino Digital Art Community
The local pioneers Gabby Dizon and Colin Goltra of the Narra Art Gallery have introduced crypto art at the Philippine Art Fair last January 2021. They wanted digital art to be showcased in an open gallery space for the crypto art community. Featured by the Narra Art Gallery are five floors, all of which serve as accessible spaces to exhibit the Metaverse or the open-world virtual real. Anyone can easily access this using a computer web browser as it is located in the 100xArt District neighborhood of Decentraland. Named after the Philippines' national tree, the Narra Art Gallery wants the doors to the country's crypto art scene opened to showcase the country's unique local talents, including those from abroad.
As collectors, Goltra and Dizon first worked on founding the Narra Art Gallery to display their acquired crypto art publicly. Decentraland has a design to give people the means to purchase land plots in the virtual universe and become active in building something similar to the MMORPGs that people play. Yet, the people who founded the Narra Gallery found out that it can potentially grow more now that there is an increase in digital art galleries. Many traditional museums and art galleries are now digitized because of the global pandemic's unprecedented repercussions.
Inside the Narra Art Gallery
The Art Fair Philippines has tapped into the display of NFTs, crypto art, collectibles, and other virtual reality projects that played a significant part in the edition this year. The guests Goltra and Dizon were able to assist people in understanding the basics of crypto and ways they can purchase NFTs. It even allowed them to meet the gallerists and artists that have been active in the community of crypto art. A significant part of the Art Fair PH this year was played by the NFT 101 Showcase.
Be a part of the Binance NFT giveaway through these steps:
Download any wallet that can support Ethereum. One example of this is the Trust Wallet.
Have your Ethereum address copied and provided according to the rules of the giveaway. You may need to have it left as a comment on Twitter or submitted through a form. Make sure that the rules are double-checked so you will know everything you need to do so you can enter.
After you win a distributed NFT, you will see it in your Trust Wallet under the tab Collectibles. From there, you may opt to either sell it at a P2P marketplace like the OpenSea or HODL.
Blockchain technology allowed Digital Collectibles to open up so many new avenues outside the conventional financial applications. Since NFTs represent the digital world’s physical assets, they can potentially become an essential part of the broader economy and not only the blockchain system.
Since it comes with a wide array of use cases, it can be very likely for developers to come up with innovations that can be exciting and new for this promising technology.
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