Hackernoon logoNon-fungible tokens (NFTs) are Here to Stay: A Primer by@heygeorge

Non-fungible tokens (NFTs) are Here to Stay: A Primer

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@heygeorgeG

A Free Spirit Person

In recent months, a Vincent Van Gogh painting, 45 drawings of a renowned Marvel Comic artist, and a rare digital sword from an online gaming world were stolen. In the traditional criminal network, these items would eventually be sold on the black market. 

But a painting called “Ethboy,” a Batman comic by Marvel Comics and DC comic book artist José Delbo, and any digital gaming assets created in The Sandbox gaming world will have no value to thieves in the black market. These owners have tokenized their assets with non-fungible tokens (NFTs) registered on the transparent and immutable blockchain. 

NFTs allow buyers and sellers to cryptographically prove authenticity, rarity, originality, and other unique attributes of digital and non-digital goods through unique digital identifiers. Based on the ERC-721 Ethereum token standard — the blockchain co-founded by the subject of “Ethboy,” boy genius Vitalik Buterin — these indivisible tokens both store and create value. The first Ethereum NFT CryptoPunk has no inherent value other than to demonstrate the NFT use case. Rare Punk 6487 recently sold for 100 ETH ($20,857).

Global supply chains, gaming platforms, the art market, and mineral developers are already tokenizing their assets. In 2021, NFTs will become a standard for buying, selling, and trading goods from digital wallets.   

Collectibles, Fakes, and Forgeries

NFTs are quickly tokenizing the $370 billion collectibles market. Old Monopoly board games, barbie dolls, and sports tickets are selling for over $1,000 on e-commerce sites. Collectors are willing to pay top dollar for that coveted Pokemon card, Hall of Fame card, or silver spoon to complete their collection. 

The rise in fakes and forgeries, however, is increasing the risk and lowering the value of the collectibles markets. Non-fungible tokens provide a way to trace the ownership and authenticity of any good. 

The Multi-millionaire Dollar Market for Tokenized Sports Shirts and Shoes

Blockchain platforms like Sorare and The Sandbox are tokenizing entire football teams and their memorabilia and collectibles — the former the Paris Saint-Germain team with David Beckham and his soccer mates, and the latter Manchester City.  But now the game players are the asset owners who can create value from brands. 

In The Sandbox, you will also find the Smurfs, Care Bears, and dozens of other major entertainment brands. Beyond entertainment, Sandbox gamers can derive value from, for example, rare or original collectibles based on popular characters. 

Cross-chain Functionality 

NFT owners are gaining more monetization opportunities through blockchain interoperability. The Sandbox virtual gaming lands is one of the early cross-gaming worlds. In the traditional gaming world, large gaming houses own assets and games. The games and assets gamers create are perishable goods. 

This gaming monopoly is being toppled by NFT-backed gaming avatars, swords, shields, and other digital assets.  With The Sandbox digital game asset maker, gamers can instantly turn game items into NFTs. Pre-season 0 of The Sandbox will open soon. Through their utility token called SAND, game developers, gamers, and investors can take any digital games and assets they create to other gaming lands. From The Sandbox Metaverse, games and digital goods will be fungible across Atari, Ubisoft, and other popular gaming platforms. 

The rise of gaming genres like social gaming and esports is feeding the cross-gaming platform frenzy. Cross-chain functionality is not confined to the gaming world. New blockchain games like MixMarvel’s Force For Fast car racing and AnRKeY X™ ($ANRX) are combining cross-platform gaming and DeFi investing, through NFT-backed yield farming, asset trading, and lending. 

Moving Towards a Tokenized World 

The games have begun tokenization and many industries are following close behind. Limitless use cases for NFTs are emerging. The NFTs of virtual gaming and entertainment lands like Decentraland and The Sandbox currently are among the top-selling NFTs. Users buy and tokenize land using the Decentraland token or LAND token in The Sandbox. 

NFTs are quickly taking off in the real world. Global trade businesses, artists and comic book artists, mining companies, and casinos are signing up in masses to blockchain platforms that enable NFT tokenization. Tokenization platforms like Rarible, SuperRare for art, and Sorare for sports memorabilia are among the top 10 selling NFTs. Expect a lot of assets to be tokenized this year and a growing share of sales in the global economy to be done via NFTs from digital wallets.

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