How NFTs Will Shape the Future of Blockchain Technology

The blockchain is poised to revolutionize and shape many facets of human existence, including entertainment, lifestyle, politics, and more, similar to many other popular technologies.

As one of the many side products of blockchain technology, non-fungible tokens (NFTs) will increase digital transparency as their capacity to establish digital ownership will serve as a financial incentive for adoption. The market is burgeoning, and many leading companies are exploring ways to enter it.

Our post will go over all you need to know about this relatively new kind of digital asset –non-fungible tokens (NFTS), how they came about, their types, as well as the key parts of their use cases that can be relevant in the future of the internet and business, among other things.

What are Non-fungible Tokens (NFTs)

Non-fungible tokens, often known as NFTs, are typically created using the same form of programming as cryptocurrency coins and tokens. Simply said, these cryptographic assets are based on blockchain technology and cannot be exchanged or traded in the same way that other digital assets may.

Unlike Bitcoin, Ethereum, physical currencies, and other cryptocurrencies that are “fungible” and can be exchanged one-for-one, NFTs are “non-fungible” and can neither be replaced nor interchanged because each has its unique traits, separate from other millions of NFTs.

Non-fungible tokens (NFTs) are digital representations of any asset. Online-only assets like digital artwork or other digitally positioned real estate or houses are examples of this. Some popular examples are in-game avatars, digital/ non-digital collectibles, tickets, domain names, and much more.

A non-fungible token is produced by a process known as minting. The word refers to the process of converting a digital object into a blockchain asset. NFTs are minted once they are generated, much like how cryptocurrencies are mined and released into circulation.

However, blockchain technology, typically the Ethereum blockchain, secures asset ownership, making it impossible for anybody to change the ownership record or copy/paste a new NFT into existence.

How did Non-Fungible Tokens (NFTs) Come About?

Although the popularity came about around 2018, the concept of non-fungible tokens has been in existence long before the creation of Ethereum–since 2012. For simplicity, we will summarize this succinct history into a neat timeline of significant NFT-related events; We will also explore each of these events in depth in this article.

2012–2016 — The Formative Days Of NFTs

The first-ever NFTs came in the form of “Colored Coins” in 2012 when a man named Meni Rosenfield released a paper that presented the idea related to NFTs on the bitcoin blockchain. The term “Colored Coins” broadly refers to a group of ways to represent and maintain physical assets on top of the Bitcoin Blockchain. These techniques may be used to prove ownership of assets like real estate, automobiles, and houses.

On May 3, 2014, the digital artists Kevin McCoy and Anil Dash created the first-known NFT which was a small video clip of McCoy’s wife Jennifer and was titled Quantum. McCoy subsequently issued this clip on the Namecoin network before selling it to Dash for $4.

The same year, a peer-to-peer financial platform and distributed open-source internet protocol based on the Bitcoin blockchain, called Counterparty was created. Users could create their tradable currencies with the help of Counterparty, which featured a decentralized exchange and permitted the issuance of digital assets.

Spells of Genesis heeled Counterparty’s lead and started out as a pioneer in the release of in-game materials.

In 2015, however, the tech slowly caught up with the world. Etheria, the first NFT project, was introduced here. After that, it was exhibited at DEVCON London, three months after Ethereum’s inception.

Then, in 2016, the meme era arrived and a tonne of Rare Pepes NFTs was released on the Counterparty platform.

2017–2020: Smart Contract Standards

The adoption of smart contract standards on the Ethereum blockchain network, which enabled developers to create tokens and other products, marked a significant change for NFTs in 2017. The smart contract standard’s subsidiary, the token standard, provides guidance to developers on how to design, issue, and use new tokens in accordance with the underpinning blockchain technology.

However, following the popularity of the Rare Pepes–two software engineers, John Watkinson and Matt Hall, the creators of Larva Labs, released their generative series of NFTs on the Ethereum blockchain under the name CryptoPunks. London’s punk scene and the cyberpunk movement inspired the experimental project, which was capped at 10,000 unique units of characters.

During the same period, another NFTs collection named “Crypto Kitties” was released. All these non-fungible tokens are ERC-721 standards on the Ethereum blockchain, in contrast to the ERC-20 standards used for crypto tokens.

Several more NFT projects were launched after Cryptopunks and Cryptokitties became successful. Decentraland and Axie Infinity are two of the most famous. The NFT market likewise had tremendous growth during this time period in 2020, doubling in value to US$250 million, while the U.S. Patent and Trademark Office received three trademark applications for NFTs.

2021–2022: Global Massive Adoption

NFTs had a rise in popularity in the first few months of 2021 as a result of many high-profile sales and art auctions. In the first three months of 2021, more than $200 million USD was spent, and there were over 1200 trademark applications.

However, 450 NFT-related trademark applications were submitted to the U.S. Patent and Trademark Office (USPTO) in January 2022. Other popular blockchain networks, such as Cardano, Solano, Tezos, and Flow, began to participate in the NFT market and develop their versions of the assets. People were able to develop their NFTs with lower expenses thanks to the newer networks, and some robust protocols were developed to ensure the legitimacy and uniqueness of the digital assets introduced.

Numerous well-known companies also extended their reach into the metaverse, including Google, Microsoft, and Facebook. In fact, around this time, Facebook changed its brand name to Meta.

The newest is that International Car Racing brand Formula 1 has filed a F1 trademark in early October, covering several categories, including NFTs and Digital Collectibles.

Types of NFTs Already in the Market

There are several NFT types that are used for a variety of things rather than pride value. As such, they are open to additions and the potential for brand-new NFTs to arise in the future. However, the following are the most significant NFT varieties across the market at the moment.

1. Gaming
2. Avatars
3. Digital Fashion
4. Real Assets
5. Domain Names
6. Meme
7. Music
8. Event Tickets and Membership Passes
9. Artworks or photography
10. Trading cards

Closing Thoughts

NFTs are here to stay and will play a significant role in the future of the art world, and span across many facets of people’s lives. This is despite reservations that have been expressed about them over the last several years. Read the next blog post to learn more about the Types of NFTs and some Popular ones around the ‘block’.

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