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NFT Coin: History & Development

NFT Coin

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence

NFTs and cryptocurrencies rely on the same underlying blockchain technology. NFT marketplaces may also require people to purchase NFTs with a cryptocurrency. However, cryptocurrencies and NFTs are created and used for different purposes.

Cryptocurrencies aim to act as currencies by either storing value or letting you buy or sell goods. Cryptocurrency tokens are fungible tokens, similar to fiat currencies, like a dollar. NFTs create one-of-a-kind tokens that can show ownership and convey rights over digital goods.

NFT coins, on the other hand, are the native tokens of NFT platforms that are used for various functions such as governance, and in some instances, minting as well. The rise in demand for NFTs has inevitably led to a rise in their parent ecosystem.

Also Read:
• NFT Marketplace: How To Choose The Best?

What are NFTs?

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Courtesy: OpenSea

NFT is short for Non-fungible tokens and are digital assets that can’t be interchanged with another and is the fundamental difference between NFTs and common cryptocurrency tokens like Litecoin, Cardano, Bitcoin, and Ethereum.

You see, one Bitcoin owned by Elon Musk of Tesla has the same value as one Bitcoin owned by Jack Dorsey of Twitter. The two coins can be interchanged, and both parties will be contented since there is no difference between one Bitcoin and the other within a cryptocurrency exchange platform.

However, for NFT tokens, such transactions are not possible. One NFT is created with a unique stamp to it within a blockchain, and its value is dependent on the value bestowed upon it by its creator and the overall NFT market. What does this mean?

It means that if today I decided to create an NFT representing my one US dollar bill, and you do the same with a different one US dollar bill, these two NFTs will not be of the same worth. An NFT derives its value from the economic market forces of demand and supply.

Some track the origins of NFTs back to tokens named Colored Coins in 2012. Colored coins were essentially bitcoins that were “colored” to give them unique properties to distinguish them from the rest of bitcoins and had value independent of the face value of the underlying bitcoin.

They emerged as CryptoPunks, digitally generated characters, and the first NFT on the Ethereum network in 2017. But NFTs became popular a little later in 2017 with the advent of Cryptokitties, a digital gaming platform on the Ethereum network that allowed buying, selling, and digital breeding of cats. The craze hooked on soon enough, and in 2018, a Cryptokitty sold for 600 Ethereum—the equivalent of $170,500.

When the craze about NFTs began, Jack Dorsey, the CEO of Twitter, created an NFT that represents his first Twitter tweet; the NFT sold for over $2.9 million. Why did it sell for that much? Does it mean if I create an NFT art of my first tweet, I can sell it for the same? You guessed it; the answer is NO! Because NFTs derive their value from the demand they receive from the digital world. Your tweet is probably not as popular as Jack Dorsey’s, and the digital artwork attracts actual interest from the NFT community.

Before we look at the different NFT coins and how they compare to one another, let’s discuss the concept of fungibility and non-fungibility in detail.

The concept of fungibility and non-fungibility

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Bitcoin, for instance, is a fungible digital asset. Most cryptocurrencies are, in fact, fungible since they are interchangeable. Today, if I send you one Bitcoin and you send it back to me, I will have exactly the thing with a similar price.

However, if I sell to you a Cryptopunk NFT, which is digital art, I can only have the same value if I buy back the exact Cryptopunk. If you sell me a different Cryptopunk NFT, then I will not have the same price.

More information and data about NFTs are required before one can sell NFTs or buy NFTs.

The concept described above represents the entire concept of Non-Fungibility. Today, trading NFTs has been common, and several artists and companies are converting their pieces of artwork to NFTs.

Originally, NFTs were developed and supported on the Ethereum network; however, there have been significant developments to include NFTs in the increasingly popular Binance Smart Chain that offers reduced transaction fees.

The process of creating an NFT from physical objects is quite simple today, allowing several people on Wall Street and throughout the world to be involved. There is absolutely no coding knowledge to create and sell NFTs; you only need an account in a website marketplace and crypto wallet linked to Ethereum.

What are NFT coins?

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Top Gaming Coins by Capitalization by CMC

NFT coins are the native digital tokens that govern the NFT protocols, today we have several NFT protocols in the crypto space that support the creation, and transaction of NFT assets.

NFT coins are starting to grow in popularity due to the popularity of NFT games with”Axie Infinity” leading the pack! Other games like “CryptoBlades” or “My DeFi Pet” are also starting to rise in popularity. With NFT games becoming more and more popular, it’s no wonder their NFT coins also gain popularity. There are currently 111 NFT coins.

For those that aren’t really into playing the NFT games themselves but instead want to buy the coins that are supporting them, there are a few coins that back up some of the most popular NFT games in the market. Although it is not a guarantee that these coins will go up, as seen with the rise of $AXS, the potential is definitely quite massive.

Axie infinity shards (AXS) isn’t an NFT per se but the governance token of the Axie Infinity platform, an Ethereum-based digital marketplace for the game Axie Infinity. AXS has nearly quadrupled in price to $11 since June 22, according to data source Messari. Such gains have given the AXS token a market value of $638 million.

While crypto gaming focuses on using crypto coins to transact with other players, native tokens are utilized to generate or gather NFTs in NFT gaming. Through NFT gaming, any assets in the game like utility, armor, land, or any asset, can become NFT and can easily be owned, transferred, and sold on the blockchain.

The NFT gaming platform also gives gamers access to NFT markets to buy and sell one-of-a-kind NFTs. Axie Infinity is a popular NFT-based online video game that is currently the most expensive NFTs collection, with more than $42 million in sales in June 2021.

Some popular NFT coins

The Sandbox ($SAND)

The Sandbox is a game where players are allowed to purchase and build customized virtual experiences. It allows a wide range of flexibility for users to create their own metaverse. The platform supports a wide range of in-game NFTs that are minted and owned by players. 

The Sandbox platform uses $SAND as its native utility token. The $SAND NFT coin allows users to purchase and resell digital assets and lands within the Sandbox Metaverse. Since the Sandbox community is growing, it is expected that the NFT coin, $SAND, will continue to increase in value as well. 

Tezos ($XTZ)

Tezos is a decentralized ledger that utilizes smart contracts. Tezo’s has witnessed an impressive bull run this year, recording a new all-time high a few days ago. According to Coingecko, the NFT coin recorded an all-time high of $9.12 on Oct 4th, 2021. Its all-time low price was recorded in December 2018, when it traded at $0.350476. 

Tezos supports a wide range of NFT transactions, which is a significant contributor to its current rise in market price. 

Flow ($FLOW)

Flow has recently been involved with NFL in a collaboration to create NTFs following NFL’s interests in the field. This move has propelled the $FLOW NFT coin to an excellent bull run since the announcement. 

The NFT marketplace will resemble the Top Shot marketplace for basketball and will run on the Flow blockchain. This move promises an even brighter future for Flow blockchain and its native digital token, $FLOW, making it suitable for long-term investors. 

Decentraland (MANA)

Currently ranked at number #104 on Coingecko, the $MANA token has a total supply of 2,194,049,927, which is equivalent to its maximum supply. Since its listing, the current ROI on Decentraland is 3720%, with the currency price standing at $0.764143. 

$MANA recorded an all-time high price of $1.6 in May 2021 before the end of the bull run in the second quarter. 

MANA is the digital token that governs the virtual reality platform that Ethereum powers. Essentially, Decentraland allows users to monetize content and applications by purchasing sections of land and building them for monetization. 

Enjin Coin ($ENJ)

Enjin is known to provide interoperability among blockchain networks in the gaming sector.  The Enjin network is a gaming platform that allows users to create sites and chats to host virtual items. 

The blockchain platform allows gamers to mint and tokenize NFTs within the game based on Ethereum. Its native token is ENJ, which is an ERC-20 token and is used to back the issuing of digital assets on the platform; this way, the assets can be priced in the real world. 

ENJ has grown significantly since its release, and the future looks even brighter.

Chiliz ($CHZ)

Chilliz is a sport-oriented blockchain project that allows participants to purchase fan tokens and be part of their real-world teams. For instance, a fan could buy Chilliz tokens for FC Barcelona, and the tokens will give the fans an actual stake in the club.

Chilliz has established partnerships with several football clubs, including Manchester City, Paris St Germain, and Juventus. 

CHZ NFT token operates on the Socios platform. It allows fans to be more involved in club decisions, separating them from passive fans. By this writing, CHZ has increased by 2.66% within the last 24hrs and is projected to continue appreciating.

Axie Infinity ($AXS)

Axie Infinity is one of the most popular blockchain NFT protocols of 2021. Arguably, it has experienced the highest price fluctuations due to its recent surge in demand. Axie’s native coin is AXS, and it powers the entire blockchain. 

Axie Infinity is a unique gaming blockchain that allows users to trade and battle within the blockchain. Axies are digital creatures on the platform that players can collect, battle, raise or breed. 

THETA ($THETA)

The Theta blockchain was built specifically for video streaming. It allows users to share bandwidth via P2P on its decentralized network. The project is backed by industry veterans like Steve Chen and Justin Kan, who are cofounders of Youtube and Twitch respectively. 

Theta has had an amazing run as an NFT protocol. The protocol is governed by the THETA coin, which facilitates voting and other governance tasks within the network. 

Since THETA aims to revolutionize the video streaming industry by offering creators better compensation and improving streaming quality, the native coin is poised to experience an impressive bull run giving long-term investors an excellent opportunity to invest. 

WAX ($WAXP)

The WAX blockchain was built purposefully to improve e-commerce transactions. It is compatible with the EOS blockchain and aims to make transactions safer, faster, and straightforward.

The blockchain utilized the DPoS consensus mechanism.WAX has developed a platform that allows users to create DApps marketplaces that allow NFTs to be minted and sold.

Since it supports the entire process of creating and selling NFTs, the native token $WAXP is projected to benefit from these transactions. In turn, we expect the value of the token to increase over time. 

DigiByte ($DGB)

DigiByte is a fork of Bitcoin, and the genesis block was mined in 2014. The project has been around for a while now and continues to offer support for various blockchain use-cases. 

DigiByte is an open-source project and employs several technologies that make it an ideal improvement from Bitcoin. For instance, it has three security layers meant to improve from Bitcoin’s security system. 

DGB, the native token of the DigiByte blockchain, has also had an impressive run since its launch. Although it has recorded relatively stagnant growth, the coin has picked up following the recent NFT craze within the crypto space.

What’s in the horizon for NFT coins?

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As earlier described, these are non-fungible tokens that cannot be interchanged with another. This allows the digital space to create a rarity for their creations.

Recently, an exemplary boom of NFTs with the Cryptopunks project, where NFT enthusiasts buy and own human characters (male or female), aliens, zombies, and apes. These punks all have unique characteristics among themselves and cannot be interchanged with another.

How viable is this?

Well, if you look at it keenly, these punks are rare pieces of creations that can be associated with a certain level of prestige. Owning one is an investment since you will most likely sell it for a higher price. People took an interest in the punks, and today the most expensive Cryptopunk was Cryptopunk CryptoPunk 3831, which was sold for $2.08 million, although it isn’t a physical object.

All NFTs have their own versions that are unique to the other and are free from forgery or infringement of ownership rights.

There is a lot involved in the emerging NFT marketplace. Although you create an NFT for free, you will need some ETH in your Ethereum wallet to include in a marketplace and allow bids. In order to trade NFTs, a third-party site like Openseas.io is needed.

Today there exist several types of NFTs, and they range widely in price. For instance, at Openseas, you can find them in the form of a video clip, music, a digital collectible, a fan token, domain names, utilities, colored coin sports, a trading card, and virtual worlds.

The price of NFT coins is dependent on the demand in the market. There is no single guide to creating the most expensive NFT; however, if you are a good content creator, your chances of creating NFT related content that can impress and elicit demand from enthusiasts is higher.

CoinMarketCap has listed several projects in the NFT space by market capitalization data. The data indicate that Cryptopunks and Art Blocks are some of the most popular projects in this space. They are all using the ETH tokens and a total collection net worth of $1,351,238,055.68 for Art Blocks and $1,020,599,263.47 for Cryptopunks.

According to CoinMarketCap, the average current price for an NFT is $731.86 and have recorded a Total Sales value of $4,947,203,883.27

NFTs and the Metaverse

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Metaverse is a fictional world that allows the selling and buying of virtual objects. NFTs have a special space in the Metaverse since it facilitates the entire economy in a metaverse.

The Metaverse allows users to participate in a virtual world where they can buy the real-world equivalents of land, property, real estate, mines, costumes, ammunition, and other game items.

A small example of a metaverse is an RPG game where gamers can buy and sell ammunition and costumes to improve their position within the game by gaining an advantage. Similarly, in a Metaverse, the entire world can be created, and users can buy and sell virtual lands and build an actual economy.

People are willing to spend as little as a single ETH token to purchase custom products in a virtual world. Gamers have been the main targets for such products; however, the use cases have spilled over, and today NFTs are bought and held for expected greater financial gains; therefore, they are considered relatively investments.

Conclusion

NFT coins utilize a relatively new concept of cryptography, and it opens an entire world for applications of cryptocurrencies and other digital assets. Clearly, the applications of blockchain technology continue to advance, and more assets are created as the NFT craze isn’t over yet in social media.

There’s a robust market for top NFT coins with players trading game assets with their NFT coins, staking their coins for weekly rewards, and participating in governance voting. NFT coins can be purchased, traded, or earned through playing the game, and their maximum supply is capped to as high as 270 million. These tokens can be exchanged for other cryptocurrencies.

Although some of these applications may not appear to impact the real world directly, they certainly impact specific aspects of life, such are the music industry, artistic space, and even gaming.

While the crypto market might seem predictable with its rangebound Bitcoin trading, the non-fungible tokens (NFT) space continues to gain adherents. One lesser-known coin ($AXS) coming out of the NFT industry has charted a triple-digit price rally in two weeks.

The crypto game market consists of both NFT and FT assets for increased liquidity. FT assets can be scaled to have high liquidity marketplaces and thereby be used for utility/consumables assets in the game. NFT assets can be used more for their rarity, which usually has high value but low volume transactions.

FAQs

There are several questions asked about NFTs in general and their viability as an investment vehicle. Before you choose to buy an NFT, it is important to conduct proper research and seek professional financial advice.

Below are some frequently asked questions and their answers.

What are 3 NFT coins that could soar 100x in 2021?

Brian Armstrong named them in this order from highest to lowest: WAX, SAND, and ENJ. See his reasons why.

When should I buy NFT coins?

It is difficult to determine the best time to purchase an NFT coin, however, as the popular saying goes, the best time to start investing is ten years ago, and the second-best time is now. 

Meaning, it is always better to get in early, as we learned with Bitcoin tips, where people who got in early made handsome gains.

However, NFT coins are not like other digital currencies since the price is not bound to increase over time. You should purchase NFT coins based on the validity of the underlying NFT protocol. 

Are NFTs worth buying in 2021?

Yes, after conducting adequate research on a particular Nonfungible token with due diligence. Well, renowned projects like Cryptopunks are some examples of NFTs that are likely to make profits in the future. So, yes, it is worth buying NFTs in 2021. Today there is an increase in the number of physical assets being converted and awarded digital ownership by NFT creators. Since an NFT transaction mostly uses a smart contract, it’s important to have enough ETH digital coins in your Digital wallet before purchasing.

When should I sell my NFT coins?

This is quite relative, and it’s dependent on the aspirations of the ERC 20 token holders. Buying and selling NFT coins is mostly a bidding business. When an owner puts up an asset for sale, bidding is done, and the owner often sells to the highest bidder.

Investors can decide to sell their crypto assets whenever they feel like the profit margins suit their needs. NFTs can appreciate and depreciate over time; however, most good NFTs always increase in price. 

Shawn Du'Mmett

Shawn Du'Mmett

Former IT development and consultant, remote team and collaboration expert, PM, CCO, writer, dreamer, idealist looking to collaborate with global teams on a global teal/turquoise organisation. Shawn's dream is working together openly, to get what writers need and want, and to solve biggest global problems. He is building a collaboration system from the start that everyone can own and define, allowing them to work together, to decide how it works and to their highest ideals.

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