HOW HAVE NFTS EVOLVED OVER TIME?
Most people think that it was cryptopunks’ 10,000 NFTs minted on the Ethereum blockchain that flagged the rise of nfts . But if you deep dive and go a few years back, NFTs started before Ethereum was born. In 2012, Meni Rosenfield released a paper that introduced the concept of colored coins. These colored coins were used as an instrument to prove the ownership of an asset. To put that into perspective, suppose if you have a land or a painting, you can mint a colored coin against the same to represent its digital ownership. In this way, your asset can be on-chain verifiable and unique at the same time. But the only difficulty back then was the incompetence of the technology.
Bitcoin wasn’t a scalable blockchain to support such a flooding number of transactions which could eventually occur when the concept has been moved to an implementation model. But when Ethereum was introduced in 2016, it proposed the introduction of smart-contracts and NFTs witnessed a new boost. Projects like cryptopunks , Crypto Kitty and later on the BAYC or Bored Ape Yacht Club introduced a new horizon in the crypto space.
However, NFTs true potential was realized when at Christie, a painting named Beeple’s Everyday: the First 5000 days was sold for $69 million. Post this deal, the art sector experienced a massive ripple effect when artists realized they can easily sell their artwork sans intermediaries at the best realized prices. Hence NFTs almost exploded when the 2021 bull-market was in its full-fervor. As time passed, NFTs evolved further and they were categorized into various segments to empower the respective industries.
1.What Are The Various NFT Types?
Before we jump to the types of NFTs, for those who are new in the NFT space, they need to know its basic definition. An NFT is a digital representation of a tangible or a non-tangible asset which is minted on any blockchain of choice. Since NFTs are unique, they cannot be duplicated and their existence on the blockchain ensures that they can be easily verified.
To put things simply, suppose Alex has a physical painting. He can make a JPEG file of the same and mint an NFT on the Ethereum or any other smart-contract blockchain that would give a digital representation of the painting in the digital space. Alex can sell that painting in a digital form to Alice by simply transferring the NFT to Alice’s wallet. Alice on the other hand can easily verify that the painting which Alex has sold to her is original and unique through her NFT.
Types of NFTs
- PFPs and Avatars: It is an avatar based NFT used as a flex which is unique making them suitable for social media profiles. Their non-imitable trait means you can have your separate identity on social platforms. A perfect example of PFP NFT is Blond:ish on Spotify.
- One-of-One(I/I) Artwork: Artists launch a 1:1 NFT which represents an updated version of the previous NFT. In a 1:1 NFT, the artists can launch different editions Artists like Beeple, XCopy and Pak have already used these NFTs which has made them quite a fortune because only one person controls the creation of the advanced features introduced in the newer versions.
- Generative Art: A generative art NFT is a common NFT minted which represents a digital art. Projects like Art Blocks, Autoglyphs, and Braindrops are perfect examples of Generative Art NFT. There’s also provision where these NFTs empower writers where they can create a special NFT merchandise of their own and sell it to other people.
- Collectibles: Collectibles are specialized NFTs in which you can capture a rare moment and own the same for value.NBA Top Shot is a perfect example to explain collectible NFTs. They are rare and that’s what drives their value. BAYC or Bored Ape Yacht Club is another NFT in this segment which gives access to Yacht Clubs, member-only benefits and many more to its users.
- Photography NFTs: This has opened a new stream of income for photographers where they can showcase their art in a truly digitized way. So far Julie Pacino, Justin Aversano and J.M. Silva have already released their photography NFTs and they have made good fortune out of the same. With the passage of time, photography NFTs are poised to go even deeper, incentivizing other creators in the space.
- Music NFTs: Music artists have struggled in the industry due to piracy and music NFTs have ended up as a panacea for them. With streaming platforms taking a lion’s share of the efforts of the artists, Music NFTs have emerged as an amenable option to monetize their art in a truly decentralized way. Artists can tokenize their music in NFTs and fans can support these artists by signing in directly to their music.
- Gami-Fi NFTs: P2E or Play-to-Earn model went viral during the 2021 bull run. Ever since then, gamers have found a new way to earn money by playing games, collecting rare in-game assets and selling the same on NFT marketplaces. Axie infinity, God’s Unchained and Decentraland already proposed this through their skins, weapons, digital accessories, characters, and virtual lands in the metaverse .
- NFT Event Tickets: Another prime use-case of NFTs was its application which transcended beyond art and music. Many organizations joined hands to organize tournaments in the metaverse and introduced NFT based ticketing to generate revenue from the same. Unlike an ordinary event ticket, these NFT event tickets ensured better tracking and incentivizing schemes which piqued the audience’s interest.
- Membership Passes: BAYC introduced this concept where specific NFTs allowed its holders to enjoy benefits which were more than their counterparts. They could access elite clubs, get access to new offerings or avail discounted prices using these NFTs.
- Domain Names: Domain names are another sector which was ripe for innovation. Through the introduction of domain name NFTs, the users capitalized on this opportunity. For example, a company dealing in marketing & content in the web 3 space could use a domain like content & marketing.ETH which resonated better with their business goals. These NFTs took the market by storm and it was further glorified when Budweiser, a Beer Company purchased the domain Beer.ETH on the ethereum blockchain.
2.How NFTs Have Impacted Other Sectors?
The crypto space paid heed to the government’s concern of sharing carbon credits to off-sets excessive environmental pollution. BCT Token incentivized those who could cut down emission and sell the same to counterparties who could use their BCT carbon off-sets to speed up their production process. This economic model has helped projects in the US and Brazil to cut down their carbon emission and work towards a sustainable foreseeable future. Base Carbon Tonne has also standardized the process so that more corporations and economies can participate in this initiative for mutual benefits.
The real-estate sector has been plagued by complex paperworks, entitlements and ownership problems. Through the introduction of NFTs, the paper works have been minimized by big players like Propy, Crypto Reality Group and LABS. NFTs have further introduced the concept of fractionalization of real-estate assets where anyone can own a property irrespective of their geographical boundaries through the use of NFTs. In this way, one can buy property in the US with zero hassles despite being a citizen of Japan. Such an advantage has never happened in the past and this could be a revolutionary moment for the real-estate segment.
Through the use of NFTs, the chaos in the supplychain can be dramatically reduced. All the counter parties who are engaged in the movement of goods can be allocated specific NFTs which will index their ownership and make them accountable for any unethical practices. In this way, it will help in proper exchange of information and reduce information irregularities.
Live Events & Ticketing
Ticketing frauds have turned into a very big set-back for event organizers. At the time of writing, the second hand ticket market has turned mammoth at $15.9 billion. Hence organizers are looking for solutions which can nip this problem in the bud. Through the introduction of NFT in ticketing, such problems of duplicate or second-hand ticketing can be resolved right away. Ticket Fairy with their NFT based ticketing platform has already introduced this concept. They have blended the best of two worlds: KYC and NFT wallets to provide very safe, secure and immutable ticketing solutions to the event organizers.
NFTs have simplified record keeping and incentivized users for participating in the ecosystem. Filecoin has been storing data archives for the government and providing users a truly decentralized opportunity where anyone with storage space can join the ecosystem and receive benefits in the form of incentives for storing the files. Their specific NFTs help ease the gratification process.
How far has SDNA tech come in implementing and developing NFT solutions?
SDNA has worked on poap based NFTs in the ticketing industry to help provide a truly gratifying experience to its clients. They have worked on developing different NFTs in the past few years to build a sustainable NFT ecosystem for the Web 3 space. If you feel that your business needs some form of digital transformation, SDNA’s experts and consultants are always there to help you upgrade.
To know more go to www.sdnatech.com