The NFT Craze: What’s it about? Should you care?
NFT’s (non-fungible tokens) have become the center of attention in the cryptocurrency world in 2021. I am sure everybody in the space has heard the term but do we really know what NFT’s are and what the craze is really about?
What are NFT’s?
Being non fungible means that an item cannot be traded or replaced for another item of similar value. Currency for example is fungible since any $10 bill can be replaced by a different $10 bill. Non-fungible assets on the other hand are unique and one of a kind.
What on the surface may seem like a bunch of pixels selling for ridiculous prices, actually has some very unique and creative use cases that have the potential to transform many industries. An early example of this is music streaming. One artist decided to give away part of his revenue from popular streaming services in exchange for NFT’s. Fans could purchase the ownership to a percentage of the artists revenue in exchange for the price of the NFT. This is one of the more creative implementations I have seen and it definitely builds anticipation for what’s to come.
Making Money With NFT’s
Currently one of the most popular implementations of NFT’s in the crypto space revolves around passive income generation. Certain NFT’s have functions in their contract that reward holders with a given crypto currency token. An example of this is a project called Cyberkongz, that rewards holders of their NFT in a fixed daily number of their projects’ token.
In gaming, virtual items sold as NFT’s enable players to make progress and complete achievements. In many games, holding these virtual assets allows players to generate income. Take a look at Axie Infinity, many players are generating more than a full time salary just by playing the game and holding their in-game items.
Even though NFT’s have just recently started gaining traction, many people, including myself, believe that they will play a huge part in transforming many industries such as entertainment or gaming.
The World of NFT’s should not be dismissed as useless images selling for thousands of dollars. With constant development of blockchain technology, we could see NFT’s make more and more noise both in the virtual and real world.