Virtual objects with virtual value
Non-fungible tokens – short NFTs – are about to take on a central role in the world of bits and bytes. Why? Quite simply, they are cryptographically unique, verifiable, indivisible and irreplaceable, and thus unique in the truest sense of the word. And this attracts collectors, because many people want to own something that is unique. Expressed in figures, sales of NFTs could increase by a factor of 250 in 2021 – from 100 million to 25 billion dollars. That’s a number with nine zeros.
Clothes make tokens
Metaphorically speaking, a token has a well-stocked wardrobe. Depending on whether it represents an economic good or shows itself as an asset, the token puts on the respective cape, so to speak. However, it also likes to take on the appearance of a real good or can be linked representatively to its use as an asset in the context of a blockchain.
Exchangeable and locked-in
In the context of financial transactions, the lower class, so to speak, appears among tokens. They enable their holders to perform actions or operations within a closed system, such as a blockchain. Or they prevent the operation if someone gets the idea to manipulate a record in the chain. However, unlike coins, tokens only ever travel within a closed system. In terms of a cryptocurrency, all tokens are fungible, i.e. exchangeable.
NFTs – Unique and confined
With NFTs, this is exactly not the case. Non-fungible tokens are not exchangeable. They represent a very specific asset and are therefore unique. The only thing that connects them to ordinary tokens is the technology of storing them on the blockchain. Which brings us back to collecting. NFTs are ideal for anything that is only available in limited editions. For example, digital trading cards, characters in games, virtual possessions and whole swaths of land in virtual worlds, or so-called crypto art.
The artwork is dead – long live NFTs
Recently, once again a work of art by the British street artist Banksy had to be used to get burned on camera by a group of artists called “Burnt Banksy”. Title of the picture: “Morons”. Its value: 85,000 EUR. However, before its destruction, the image was digitized and converted into an NFT. The “Pest Control” institution set up by the master himself had verified the original as such and is now keeping the certificate of authenticity until the NFT is auctioned off. Then it will be given to the lucky owner together with the cryptographically unique, verifiable, indivisible and irreplaceable unique code of the NFT. Perhaps this is Banksy’s answer to Walter Benjamin‘s questions about the work of art in the age of its technical reproducibility.
Another example of an NFT artwork: artist Mike Winkelmann’s collage “Everydays – The First 5,000 Days,” consisting of 5,000 tiny images of digital pictures.
The metaverse grows
Other projects reach for the stars of a user-controlled, decentralized online ecosystem. Web 3.0 is supposed to dissolve the power of the few giga-platform providers and be blockchain-based, distributed among independent computers. Every user will then be a part of Web 3.0 and have absolute control over their data at all times. Some startups with this vision are currently presenting themselves as promising objects for investors.
WWW for cryptocurrency
One of these projects comes from the United Arab Emirates and is called Nexus. Here, a complete ecosystem with large-scale product and service packages is to be created. The special thing about it is the loyalty point services, with the help of which customers are to become fans. The operators hope that this will create a lifelong bond between users and a brand or product philosophy. Nexus also provides Generative NFT with signatures of artists, athletes and other celebrities. In addition, however, mystery boxes with rare collectibles are also to be issued. An overarching goal is improved blockchain technology that can handle virtual scoring traffic faster. The favorite idea not only in the United Arab Emirates: a globally networked payment system for all transactions, including small ones. This could become possible through the legal introduction of a cryptocurrency on a national level. Countries such as Denmark, Malta or Switzerland at least see no problem with payment in cryptocurrency. El Salvador was even the first country in the world to declare bitcoin as legal tender.
Learn – Trade – Play
Anyone who wants to move safely and adeptly in Web 3.0 and create assets in cryptocurrency must learn and practice. Where better to do this than with expert guidance in virtual space? So go on an exploration tour in the digital skyscraper of Bloktopia. There, you’ll find yourself in an immersive metaverse running on the Polygon network, with 21 floors spread out with a limited supply of 21 million Bitcoin. On each level, investors get a lot on offer: They can improve their skills in dedicated facilities by directly accessing educational and learning tools from prominent crypto insiders. They can try out what they have learned, for example, by buying and selling real estate or using other sources of income such as token staking, advertising or games. The fact that this form of investment is a contemporary idea can be seen from the many requests on the net.
Based on an Ethereum blockchain, Illuvium is a multiplayer role-playing game in a 3-D open world whose species are Illuvials. Each Illuvial is unique as a non-fungible token. Its value can be increased if its owner improves and levels it up through clever tactics in battle. This is where the ILV token comes into play, which rewards players for their achievements. This could be trivial, didn’t the ILV rank among the 200 most valuable cryptocurrencies these days with a market capitalization of around 350 million euros, according to blockchainwelt.
Outlook – Will NFTs become part of a new startup financing strategy?
As yet, only digitized artworks and digital assets can be acquired with NFTs. Why not make startup ideas available to the market in the form of NFT shares? We at magility are watching the developments closely and are excited to see what the new “NFT market” will bring in the future. Are you currently dealing with this topic and interested in an exchange? We at magility welcome your suggestions and your views on the current developments in this area. Contact us right here.