NFTs have taken the internet by storm over the last 18 months. From something completely unheard of to a market that’s worth over $40 billion, NFTs have had an incredible year. But what exactly are NFTs, and more importantly, what’s the point of them?
While some people think that NFTs don’t have any real purpose, many industries are incorporating them in innovative ways. This is especially true within the gaming industry, which has taken to using NFTs as unique skins, methods of improving the diverse styles of play within gameplay, and digital methods of trading.
In this article, we’ll be explaining what NFTs are and breaking down how you can buy one, where they are stored, and the various functions associated with them. Let’s get right into it.
What exactly is an NFT?
NFTs, which stands for Non-Fungible Tokens, are digital assets that are stored in the blockchain. When a person buys an NFT, they’re buying ownership, with proof of their digital ownership being stored online. Due to the blockchain technology that’s used for this process, which is incredibly secure, NFTs are a safe digital asset and are famously difficult to steal.
Considering that NFTs can be anything digital, people are seeing everything from digital art to GIFs turned into NFTs and sold online. Launched and sustained on the Ethereum blockchain, every single NFT represents a digital asset that cannot be duplicated, which is why people are paying so much for them.
How do you buy and store NFTs?
Most commonly, NFTs are sold on NFT marketplaces. These are systems where people can either directly buy or bid on NFT auctions. Additionally, they act as digital auction houses, exhibiting NFTs that are about to go on sale for everyone to see.
Currently, the three biggest NFT marketplaces are OpenSea, Rarible, and Nifty Gateway. Once a person buys an NFT on these platforms, their proof of sale is then sent to the Ethereum blockchain.
Imagine this as a series of blocks that, once placed down, cannot be picked back up or changed. The immutability of blockchain ensures that once someone buys an NFT, their name is safely stored on a chain. If someone were to look up an NFT in the blockchain, it would clearly state the owner’s name on it.
While digitally, the original NFT and its owner’s details are stored on the blockchain, the NFT will be accessible to see from the owner’s wallet. These wallets, just like crypto wallets, are secured using a set of digital encryption pathways, as well as a private key.
Once purchased, NFTs can also be transferred off NFT marketplaces onto cold storage hardware wallets on a third-party platform. These offer advanced security for digital assets.
What can you do with an NFT?
NFTs haven’t skyrocketed in public attention simply because they’re new. On the contrary, there is a range of applications for NFTs that help boost their value, providing services alongside also just being interesting to look at. While there is a range of uses for NFTs, we’ll be focusing on the following three:
- Digital art
Let’s break these down further.
One of the most well-known games that’s run directly in line with NFT purchase and renting is CryptoTanks. In this game, the classic 8-bit Tanks game has been reconfigured, setting up either team vs. team or battle arena-style gameplay. In this game, a user will move a tank around the screen, attempting to destroy other players without being blown up themselves.
NFTs come into this game in two ways: providing visual diversification for users and granting certain abilities that are attached to specific NFT designs. A user will be able to buy or rent an NFT tank and then put this NFT onto their base tank as a unique skin. This will distinguish them in games and bring something new to their playing experience.
Additionally, CryptoTanks also ensures that every NFT tank comes with a different weapons set, movement speed, customization panel, and armor level. Due to this, alongside visual motivation for buying an NFT on the platform, users are also motivated to purchase or rent a tank with good in-game statistics.
Considering that CryptoTanks runs on the Polygon ecosystem, it has high processing speed, eliminating the major annoyance of lag that traditional gamers experience. This is just one example of how blockchain technology is shifting the use and application of gaming worldwide.
Founded in April of 2021, CryptoTanks is a great example of how NFTs can be woven into the world of gaming to bring an exciting new layer to the platform.
Perhaps the most well-known use of NFTs is simply to be admired due to their unique artistic features. There is no denying that NFTs have changed the art world forever, significantly boosting the opportunity for artists to make a living with their art. What once would have taken large audiences and devoted fans now only takes a little bit of luck.
If you strike the right chords when uploading art to an NFT collection site like OpenSea, then you can make a significant amount of money from selling your art. People worldwide have turned to NFTs as a new form of dealership, buying specific pieces to ‘own’ them.
In fact, this digital form of art has already made a significant contribution to the world of auctioning. Most dramatically, an NFT minted (made) by the artist ‘Beeple’ sold for $69 million through the internationally renowned Christie’s auction house. This wasn’t due to the artist already having a big name, in fact, the bidding started at only $100.
This new digital platform of art is also incredibly accessible. While auctions used to be geography-specific, often only receiving guests and bidders from the local area, NFT markets are completely run online. This move towards the digital space means that anyone, at any time, anywhere in the world, can log onto an NFT platform and browse through the artwork currently up for sale.
Once you purchase an NFT, you officially own it, with your information being stored in the blockchain. Just like normal art, you don’t actually own the copyright to the art, but you’ll still be able to admire the NFT nonetheless.
Alongside collectibles in gaming that somehow change the appearance or characteristics of your characters, NFT collections have also become a fairly famous part of the market. Creating NFT collections is where an artist will make a certain number of NFTs that all have the same theme or are related to one another.
A famous example of this would be the Bored Ape Collection, which is a finite collection of 10,000 ‘Bored Ape’ images. Each of these images is an ape character with a different skin color, background, and different costume elements. Most recently, a Bored Ape sold for $2.8 million at auction.
Whole sites are now designed to accommodate for NFT collections, with Starly being one of said sites. Every week artists release their collections on the platform, always centered around a central topic or idea. Most recently, Melos Studio released an NFT collection that centered around the life and achievements of David Bowie, with trading card designs representing moments in his career.
These collections are released on a certain date, with buyers flocking to buy and then auction NFTs that are a part of that set before the sales period ends. This popular community form of trading is akin to trading card resales, with each NFT being housed in a trading card frame. The next collection that’s set to be released on Starly is by PhaseRunner and centers around celestial beings.
Collections are a core part of NFT functionality due to one core idea: scarcity. The idea of only having a certain amount of something creates the idea of demand. Especially in the case of Bored Ape, each of the pieces is now skyrocketing in value as famous people flock to claim their own ape. With 10,000 pieces, there is enough for many people to get something they like, but not enough to the extent where just anyone could buy one.
The link between NFT collections and scarcity is the core element that drives up their price, with investors flocking to buy NFTs in order to diversify their portfolio and use NFTs are a financial tool.
Final Thoughts on NFTs
Whether just a financial investment into a new stream of digital art, a way of broadening your portfolio, or a way of bringing a fresh element to your favorite games, NFTs have a wide variety of uses.
No matter if you’re well-versed in the world of NFTs or you’re just hearing about them, why not give the most accessible form, gaming, a go? You’ll be able to start playing without spending a cent, with NFT gaming platforms like CryptoTanks allowing you to earn NFTs while you play.
Discussion about this post