Non-fungible tokens, or NFTs for short, are all the hype in the blockchain space at the moment. They gained a lot of attention when they gave artists around the world a chance to protect and market their works of art online during the COVID-19 global lockdowns. The question is, is there more to NFTs, and is the hype around them justified? This article will look at how NFTs are being used in the blockchain space and whether or not the hype around NFTs is justified.
Before we proceed, let’s look at what NFTs are exactly and discuss the technology powering them.
NFTs Explained
A non-fungible token, or NFT, can digitally represent anything. This can include data, information, a real-world object, clothing, music, or pieces of art. These non-fungible tokens are unique and are the original copy of the item they represent. Unlike most cryptocurrency coins, they cannot be replaced by another coin in the same cryptocurrency. For example, a Bitcoin coin can be replaced with another. This is why a Bitcoin, or any other cryptocurrency, coin is referred to as fungible and why an NFT is non-fungible.
Now that we have covered why NFTs are non-fungible, let’s look at the pioneering technology that has made NFTs possible; blockchain technology.
What is Blockchain Technology?
As mentioned, blockchain technology is the technology that has made NFTs possible. So what exactly is a blockchain? Well, a blockchain is a decentralized digital ledger. This basically means that the control and maintenance of a blockchain is not the responsibility of a handful of people or a central entity like an organization or an individual. Instead, a blockchain is powered by the people that use it! Every person that uses a blockchain, and runs a computer on the network, makes a blockchain a distributed and global network.
This is a very high-level overview of what a blockchain is, but it is crucial that we go over it to understand how NFTs came to be. By utilizing the privacy, transparency, autonomy, and decentralization of blockchain technology, NFTs can represent anything digitally and verify ownership of these digital representations and make them transferable, feats that were very difficult to achieve before the invention of blockchain technology.
Now the part you have been waiting for, why the hype behind NFTs?
The NFT Hype
The hype around NFTs started when art began being turned into NFTs. When this happened, it brought the relatively large collector’s market to the blockchain space. It also contributed to cryptocurrency and blockchain’s existing speculator market. Art speculators and collectors worldwide could now collect, purchase, and sell artworks on the blockchain network. They could also do so anonymously and securely, plus verify that they own the artwork. All of this was considered extremely difficult, if not impossible, to accomplish before blockchain technology.
After NFTs made their way to the art world, companies started exploring what else NFTs could be used for. This is one of the contributing factors to the creation of a metaverse. By using NFTs, in-game assets can now be transferable. So anyone can buy, exchange, and sell in-game assets with other players in the metaverse. This transferability of in-game assets introduced the play-to-earn space to the world. Meaning, anyone can now play blockchain-powered games and earn money from doing so.
As you can see, the creation of NFTs created a snowball effect. From making its way to the art world and giving artists a way to earn money for their work during the lockdown to now providing anyone around the world the ability to earn by playing games in the play-to-earn space. The innovation around NFTs has been a focal point for most companies in the blockchain space, as they are eager to keep the hype around NFTs going.
Is the Hype Around NFTs Justified?
To determine whether or not any form of hype in the blockchain and cryptocurrency space is justified, simply look at the utility around what is being hyped. With this in mind, NFTs solved a major problem in the art world. They give artists around the world an online platform where their art pieces cannot be replicated. In this online platform, artists can also reach a broader audience in the art speculation and collection space and verify that the artwork they were publishing was the original. This scenario on its own gives NFTs a lot of utility.
The utility of NFTs is further expanded in the play-to-earn space. People can now play blockchain-powered games and earn money for doing so. This is mainly through trading in-game assets in these games, and these assets are all NFTs. The timing of the debut of the play-to-earn space was perfect because it was during the COVID-19 pandemic. As people around the world lost their jobs due to COVID-19, they turned to NFTs and blockchain games to make money, and they were not disappointed.
Another significant fact around NFTs is that they are slowly becoming the new blockchain-enabled store of value. Before NFTs, the most prominent public blockchains were used as a storage of value as people transferred portions of their fiat currency values into cryptocurrencies like Bitcoin and Ethereum. However, the price of NFT in-game assets is now proving to be less volatile than these large cryptocurrencies. This makes NFT in-game assets more stable storage of value.
As you can see, the utility of NFTs is already there. With the intense innovation and exploration around NFTs, their utility will only continue to increase. Maybe the hype around NFTs is a bit much for the amount of utility the technology has at the moment, but the market is always excited with new technology that has potential. If the current rate of innovation around NFTs continues, we could see the closing of the small gap that exists between the technology’s utility and its hype.
CORE MultiChain Will Contribute Towards the Utility of NFTs
CORE MultiChain is a revolutionary blockchain ecosystem. The team behind the project is busy with extensive research into ways that the utility of NFTs can be expanded. The team is creating their own blockchain-powered game to explore the technology’s potential fully. In this game, NFTs will be used in new and innovative ways! Furthermore, the CORE MultiChain team is also looking at NFT use cases that extend far beyond just blockchain-powered games.
