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Non-fungible Tokens (NFTs) could be the next big wave in the crypto market: A detailed explanation on NFTs

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Crypto Kitty

Non-fungible token, also known as nifty, is a digital asset that is tokenized. It is a special type of token that is not interchangeable or replaceable. 

NFT belongs to the family of cryptocurrency, in the sense that it is traded on a blockchain and it has market or monetary value attached to it. It is also a virtual token that can be used to create and verify ownership of an asset, through cryptography. 

There are several examples of non-fungible tokens, which are collectibles, access passes, fashion pieces, game items, digital art, event tickets, domain names and ownership records for physical assets (such as a driver’s license), amongst other examples. NFTs cannot be found and traded on normal cryptocurrency exchanges, instead, they are bought or sold on digital marketplaces like Rarible and OpenSea. 

The major difference between cryptocurrencies and non-fungible tokens is that an NFT has distinct attributes that make it different from other NFTs, even if two or more NFTs seem similar to one another. These attributes can include metadata, visuals and serial numbers. It can also affect the market value of the NFT, based on what attributes are valued by the people who buy and sell them.

Short History of Non-Fungible Tokens

Non-fungible tokens were created by Witek Radomski, the co-founder of Enjin Coin. He wrote the programmable code around June 2017, but it was released two months later.

The most popular example of the NFT project in blockchain history, is Cryptokitties. There are several thousands of Cryptokitties in existence. However, they are not created equally. Each blockchain-based cat is unique and when you buy a cyptokitty, you are gaining the ownership of an NFT. 

If you send someone a Cryptokitty NFT and receive a Cryptokitty NFT from someone else, the one you receive will be a completely different Cryptokitty from the one you sent (due to inbuilt attributes). Cryptokitty NFTs are often more valuable than one another, and this depends on the rarity of the NFT and other factors.

There are several other platforms that use NFTs. These include Decentraland, Nifty Wizards and Crypto Twerps. 

Fungibility

The word “fungible” means something that can be  replaced by something similar; interchangeable, exchangeable and replaceable. Gold, Fiat, Bitcoin and  Ether are fungible because an individual unit is interchangeable with any other equivalent individual unit. A thousand-naira bill is interchangeable with any other genuine thousand-naira bill. This feature is imperative, as most currencies aim to be a medium of exchange.

Characteristics of Non-Fungible Tokens (NFTs)

Indivisibility:

Fungible tokens and currencies are generally divisible, they can be broken down into units and denominations respectively. Bitcoin and other cryptocurrencies can be sent in units, like $50 or $100 worth of bitcoin. Non-Fungible tokens, however, cannot be divided further into smaller units. It can only be bought, sold and held whole.

Uniqueness: 

There is metadata that lies deep within an NFT. The Metadata denotes what makes the asset distinct from all the rest. A metadata is a permanent, unchangeable record that explains what the NFT is all about – like a receipt that proves the ownership that you bought a laptop.

Scarcity: 

Non-fungible tokens are tokens that create digital scarcity since they can only be produced in limited amounts, and can be verified without any centralized institution that authenticates it. NFT is a good example of how a token can be used to create scarcity. This makes NFTs very attractive and this characteristic plays a special role in increasing the market price of a NFT.

Interoperability:

The standardization of non-fungible tokens allow for a higher level of interoperability, which helps the users. This means that unique NFTs can be  easily transferred between different applications.

Tradeability:

Instagram bans individuals from selling their account to others, but non-fungible tokens can be easily traded on specialist markets, such as OpenSea. In the gaming industry, this enables players to trade their rare cards for another card. 

How does NFTs work?

ERC-721 is the standard Ethereum Non-Fungible Token, as used by platforms such as Decentraland and Cryptokitties. EOS, WAX and TRON blockchains equally have their own NFTs standard. Cryptocurrencies like bitcoin, litecoin, ripple and other ERC-20 based tokens are all fungible.

Non-fungible tokens can be created on an enabled smart contract blockchain with needed tools, protocols and support. NFTs and their smart contracts allow for detailed characters to be added, like rich metadata, owner’s identity etc.

Non-Fungible Use Cases: Beyond Digital Currency

There are several applications of non-fungible tokens, and it is virtually endless.

World of Gaming:

Non-fungible tokens are changing the world of gaming. NFTs can be used to represent inbuilt game assets and are fully controlled by the gamers, instead of the game developer.

Players can now freely acquire and trade assets like knives, cloaks etc. The creation of non-fungible tokens for these aforementioned assets make them tradeable for real money and inbuilt game virtual tokens.

Collectibles:

An example of collectibles is the cryptokitty. It is a video game, built on Ethereum, which enables players to breed, collect and exchange virtual crypto cats. Each NFT created on the cryptokitty platform is absolutely distinct and impossible to replicate. 

The crypto-collectibles are gaining a lot of interest in the crypto space, individuals can now purchase tokenized versions of their favorite celebrities or stars. In addition, users are using NFTs to digitize traditional collectibles, such as coins and baseball cards.

Fine Art:

Digital Artists have been facing copyright issues with their artworks. With the special characteristics of non-fungible tokens, digital artists can now relax, create and sell their artworks without fear.

Since there is verifiable proof of ownership attached to the digital artwork, this allows the creator to retain their copyright, as the artwork cannot be easily duplicated. 

Identity and License:

There are several forms of identification issued by the government to the masses. But most times, those identity cards either get lost or stolen. Education certificates, medical histories, driver’s license, voters card etc, these can be all digitized by NFTs. This feature will, in turn, give the masses greater control over their data.

The use of NFTs for software licensing will drastically reduce piracy. This allows people to sell NFT-based licenses in the open market for gains. This way, individuals can avoid yearly subscriptions, use a software against the purchased license, and after the use, sell it to another individual.

Non-Fungible Tokens’ Market Value Statistics

Early this year, the non-fungible token economy’s all-time US dollars sales volume crossed $100 million and it is forecasted to reach $500 million in all-time USD volume by the end of 2021.

The market capitalization of non-fungible tokens reportedly grew by 17% in 2019, and it is predicted to grow by 50% by the end of 2020, due to the recent influx of newer applications of NFTs.

The dollar value of NFTs transferred in 2018 reached highs of $159 million and fell to $152 million in 2019. This is due to the stagnancy in the number of players in 2019, but there has been an increased number of participants in 2020.

Predictions suggest that there is going to be a 64% increase in the dollar value of NFT in 2020 and more in 2021. This has been attributed to the fact that there is an increased mainstream adoption of NFTs. Major companies like Nike, Louis Vuitton etc are already into non-fungible tokens. 

Future of Non-Fungible Tokens

Non-fungible tokens are filled with many opportunities and possibilities. This ranges from creation of secure and immutable ways of storing birth certificates to academic qualifications. One day, our mobile wallets could contain verified proof of the certificates, license and assets we own.

Non-fungible tokens will be used in the banking and financial industries, to tokenize traditional assets like precious metals and stocks.  

Big brands are equally already licensing their contents for NFTs. Formula 1, a major racing company has signed an agreement with Animoca brands, which allows their players to build a collection of NFTs, including cars, parts and drivers, in an Ethereum-powered game. 

The future of non-fungible tokens is very bright and it is undoubtedly the next boom in the crypto space. Since NFTs have the ability to digitize assets, the application of this technology is unlimited.

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Crypto Assets

Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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6 Cryptocurrencies to leverage for Building Personal Wealth Long Term

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“Investing in Crypto should be viewed as another path towards financial independence that can help people beat inflation over time.”

—Alex Mashinsky (CEO, Celsuis)

The Crypto market is blooming. Nearly 1 in every 3 individuals in Africa, particularly Nigeria, currently trade cryptocurrencies for one purpose or the other. For more than a decade now, blockchain technology has pervaded the financial markets and persistently received traction from various quarters. Its adoption rate in Africa is a force to be reckoned with. The reports are glaring enough. This has then cultivated the growing appeal of the people in trying to employ crypto as a viable tool to build wealth, albeit long term.

Recently, thousands of cryptocurrencies were known to exist in the market and the numbers keep expanding. It is, therefore, imperative that these digital coins are closely observed to identify the favourable ones for a long-term game. We, at Decentralize Africa, know this. You don’t need to make any emotional rush. This is why we’ve put together highlights of sustainable cryptos that can help you build a fortune over time if you play your cards right.

  • Ethereum (ETH)

Coming first on the pack is Ethereum. The reason for this is not far-fetched. Earlier this year, ethereum was said to have amassed a market capitalization running into billions of dollars. As if that is not enough, Ethereum pointed out its plans to remake its consensus algorithm. This will in no small measure help the crypto network perform several seamless operations and that too with reduced energy. 

The major change that was done to Ethereum’s network, i.e, a modification to Proof-of-stake, will enable players in the system to pitch ethers in a more protected and also rewarding account. This is quite comparable to the bitcoin system. So, yes, Etherum is something that should be in the plans. 

  • Stellar (XLM)

Of course, Stellar has to find a place here, innit? For one, the cryptocurrency holds promising potential for those interested in the long shot. It is more or less a fertile space in the string of blockchain networks. Most of us are privy to how tedious, cross-border transactions tend to appear. This is where Stellar comes in. The versatile platform is capable of completing payments in a matter of seconds at a meagre fee; which is payable using the Stellar coins. Stellar’s efficiency is no doubt commendable. Although like most coins, it has had its share of a downward trend in prices, there is no doubt that Stellar is yet to reach its peak. As such, analysts have observed that there’s room for expansive growth as the year’s roll by. 

  • Bitcoin (BTC)

This sequence is deliberate though. We all know the mighty bitcoin will be here, don’t we? Bitcoin has amassed a wild price range, an ever-growing market capitalization and its prospects for investment opportunities speak loud enough. Although there is an influx of cryptocurrencies today, Bitcoin embodies a large percentage of the market value. 

Investing in bitcoin is never a bad business. It has its lows of course, but it jumps pretty back in most cases. Its wide acceptability is a testament to this fact. Several companies are integrating bitcoin in their payment structure, and business-men, banks are not left in the loop as well.

  • Solana (SOL)

Interestingly, Solana is one of the few digital coins to maintain a steady rise in value. It came up the pack in 2017 and has since improved its value system over time. It offers enticing packages, by being used to complete rapid transactions and every other thing that makes it a good catch. Solana might seem a bit obscure at the moment, but it is certainly one of the best to look out for.

  • Chainlink (LINK)

More accessibility means more acceptance, right? Chain-link is that cryptocurrency that’s relatively available to most people. It’s inexpensive and a good store of value as well. This is one of the reasons that attracts many investors to it. If you are looking to invest in a cryptocurrency in this context, this is one of the coins that can help build your financial portfolio in the long run. 

  • Cardano (ADA)

It is observed that the Cardano network holds a somewhat appealing impression for myriads of reasons. It consumes far less energy which then translates to a faster transaction rate. Also, it proves to be secure and it is one blockchain network that is quite keen on developing its systems.

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Bitcoin in Africa

ICE3X, One Of South Africa’s Oldest Crypto Exchange Cease Operations

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ICE3X

ICE3X, one of the first and oldest crypto exchanges in South Africa and across Africa which was founded in the year 2013 with roughly 80,000 clients ceased operations permanently due to low liquidity.

Earlier this year, ICE3X announced that they noticed some discrepancies in the balances pertaining to Bitcoin and Litecoin held on the platform on March 16. After several consultations and deliberations with their partner Merkeleon.com and subsidiary Coinspaid.com, no satisfactory conclusion was reached.

But on the advice of their auditing and legal team, ICE3X suspended deposits and trading of cryptocurrencies on their platform. In addition, Bitcoin (BTC) and Litecoin (LTC) withdrawals were also suspended pending the outcome of a full investigation and reconciliation.

ICE3X said that clients holding cryptocurrencies on their platform excluding Bitcoin (BTC) and Litecoin (LTC) will be able to withdraw their funds. They further said that this was done in protection of their clients.

On March 23, withdrawals from ICE3X platform by clients were totally disabled, and it was announced that withdrawals would now be done manually – clients would have to submit their withdrawals request via a Google Form.

The homepage URL of ICE3X which is ice3.com. Users will now be redirected to https://ice3x.co.za/status-update/ with no withdrawals support for Bitcoin (BTC) and Litecoin (LTC) yet, but clients were advised to place their withdrawals request for both.

On April 6, according to the website of 1CE3X, the South African Crypto Exchange will not be returning back to operations and advised to start their liquidation proceedings. Also, there are no longer withdrawal requests pending for any currencies except Bitcoin (BTC) and Litecoin (LTC).

At the point of writing this article, the latest update from ICE3X, shows that all withdrawal requests submitted up to April 6 have been rectified and all the remaining assets either cryptocurrencies or fiat are held in trust by Manong Badenhorst & Badenhorst Attorneys. Also, liquidation proceedings have been initiated and clients are advised to download the requisition form, which should be sent as a mail to avj@natliq.co.za.

Recently, Binance announced that ZAR trading pairs was delisted from their platform, according to the official Twitter handle of Binance Africa on March 31. It was recommended that users either trade out of their ZAR positions or withdraw all their ZAR balances before April 2, 10:00 AM (UTC). The affected trading pairs are USDT/ZAR, BTC/ZAR, ETH/ZAR, BUSD/ZAR, BNB/ZAR.

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