Blockchain Technology’s ability to prove ownership and authenticity of Non Fungible Tokens will provide the reliability base needed to sustain this sector.
It is widely known that Blockchain Technology provides the base for cryptocurrencies. It is also, to a lesser extent, known that blockchain technology provides immutable, trustless platforms for governments and organisations such as the United Nations to manage resources and provide humanitarian services around the globe. In commerce we see businesses such as Walmart and Coca Cola already reaping the benefits blockchain technology brings to their supply chains and costs.
However, notwithstanding the above, we really are just scratching the surface of the benefits and future usage that blockchain will bring. Decentralised Apps (DApps), and Decentralised Autonomous Organisations (DAOs) all rely on Blockchain Technology to function. Another notable area of blockchain based business that is burgeoning is the growing development and use of Non Fungible Tokens (NFTs).
For those not too familiar with NFT’s it’s just to consider Bitcoin. Every Bitcoin is identical to every other Bitcoin and has the same value. This means that any Bitcoin can be exchanged with any other Bitcoin ie. they are mutually interchangeable ergo they are fungible. It follows therefore that tokens which have their own unique value based upon the amount that someone is prepared to pay for them are therefore less directly exchangeable and these are known as non fungible Tokens.
Each NFT contains its own unique information which could, say be art based, musical, collectable… It is the content of the NFT and its desirability which will determine how much someone is willing to pay for it - An NFT containing Jack Dorsey’s first Tweet recently sold for $2.9m.
At first glance the obvious question would be why buy crypto Art when anyone could potentially have a copy which may appear indistinguishable from the original piece? Whilst there is very little difficulty in identifying the Musee du Louvre’s Mona Lisa as Da Vinci’s original masterpiece the same is not quite so easy with digital art works. Until now that is with the advent of the NFT! Owning the NFT which contains the original work acts as proof of ownership of the original work. The two key cryptography acts as the original producer’s signature and provides on-going security and integrity. Whilst anyone could have a copy of your art piece, only you will have the original - much the same as in the non digital art world.
It is Blockchain Technology that is crucial for creating and sustaining NFTs. The world has already woken up to the potential of this marketplace. In 2020 the NFT market volume was worth around $250m. In the first half of 2021, according to Reuters, this figure had already surpassed $2.5billion. This phenomenal growth is backed up by data relating to the number of Blockchain wallet users which has grown from 3m in 2015 to over 68m by February 2021. The strength of the NFT marketplace can also be measured by the confidence of buyers who outnumber sellers by over 2 to 1, and this sector is set to continue its exponential growth given the many new streams that are coming online as NFTs.
Chainlify, aware of the growing significance of this sector, is implementing an additional layer to its blockchain platform which will guide and assist developers of NFT marketplaces to expedite their projects to launch. Free in-house hosting of pre-launch work will help all developers to jump start their projects whilst keeping costs to a minimum.
Register with Chainlify at www.chainlify.io and start reaping the benefits free of any charges today.
Illustration: a piece by Mike Winkelmann, the digital artist known as Beeple. His piece was originally sold for $66,666.66 and was resold earlier this year for $6.6 million.