NFTs or Non Fungible Tokens are cryptographically represented unique tokens on the blockchain which are linked to a digital or physical asset providing a proof of ownership over the internet. NFTs which represent digital assets can range from artwork, avatars, digital collectibles, music, in game collectibles, etc. Additionally NFTs which represent physical assets can range from physical buildings, physical artwork, physical collectibles etc.
What are NFTs?
Non-fungible tokens are digital representation of assets that whose identities are represented in the form of a smart contract.
Each smart contract that represents a NFT is unique to that particular asset representing its identity information. Each NFT has 3 parts which make the NFT unique. They are the traits that describe the NFT, the actual asset and the unique hash on the blockchain. All these collectively make an NFT provably unique on the internet.
Typically NFTs can be purchased using fungible tokens i.e crypto currencies. As the NFTs are deployed over a particular blockchain on which it can exist, they can only be purchased over a token which is used in the network it exists.
NFTs primarily are represented as a whole and did not allow fractional ownership, but there are new crypto projects trying to establish a fractional ownership concept which is still in the early stages.
Why are NFTs so special?
Usually NFTs are not just digital assets. They become very interesting due to their rarity and exclusive utilities offered by their creators.
One good example is when NFTs can be used to provide access to a closed community of people or activities. One such good example of an NFT brand is BAYC (Bored Ape Yacht Club) which went viral in 2021, when all the celebrities took part in investing into the BAYC NFTs creating an exclusive and attractive community.
What are some of the popular projects?
While there are many NFT projects and it is hard to cover all of them in this blog, we are only picking the top 3 NFT projects due to their uniqueness and popularity as a brand.
CryptoPunks belong to the category of Profile Picture NFTs (PFPs). They were one of the earliest NFT projects in existence and was created by Larva labs. They are 10,000 NFTs which represent punks with attributes like gender, headgear and eyewear.
CryptoKitties is a game like NFT where you exchange kitties by sending them to each other and they evolve during the sending i.e you will send one kitty and receive a completely different one. The kitties initially existed on Ethereum blockchain but now have been migrated to the flow chain.
Bored Ape Yacht Club
They are series of profile picture NFTs which represented apes representing boredom. They are similar to cryptopunks and they have attributes or traits that represent each NFT. They are also 10,000 NFTs in this collection. BAYC has one of the strongest communities and a lot of NFTs have been created under the BAYC representation like the Mutant Ape Yacht Club, etc.
BAYC offers an exclusive access to its owners and these community members include a lot of celebrities ranging from Gary Vee, Eminem, Snoop Dogg etc.
How brands are entering NFTs?
Now a days lot of fashion brands are entering the NFTs and Metaverse space. Large fashion and sports brands like Nike, Adidas, GAP, etc are all entering the fashion wearables and collectibles space. Below is one such example of a shoe NFT. These NFTs can offer utilities ranging from early access to limited edition fashion to special custom made fashion.
How and where can you buy NFTs?
NFTs can be purchased on various platforms using various different tokens. Here are the top 5 NFT marketplaces.