NFTs, What Are They and What Are They For: A Guide for Non-tech Users Part 2 — Use Cases
We’ve talked about how NFTs work in Part 1 but now, to better understand the technology, let’s look at some famous NFTs and some special use cases.
Famous recent NFTs
Now let’s see who’s in the news for minting and selling NFTs. Let’s look at just a few of them.
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║ # ║ Name & Link ║ Sold Price ║
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║ 1 ║ Everydays: The First 5000 Days – Beeple ║ $69 M ║
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║ 2 ║ Logan Paul – Pokémon Pack NFTs Collections ║ $3.5 M ║
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║ 3 ║ Axie Infinity Game – Genesis Virtual Game ║ $1.5 M ║
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║ 4 ║ Kings of Leon – YellowHeart NFT collection ║ $1.4 M ║
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║ 5 ║ Alien Punk 1 – CryptoPunk Game ║ $0.75 M ║
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║ 6 ║ Nyan Cat – Meme ║ $0.6 M ║
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║ 7 ║ Burnt Banksy – Banksy ║ $0.38 M ║
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║ 8 ║ The Dragon Cat – CryptoKitties Game ║ $0.17 M ║
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║ 9 ║ Founder Cat – CryptoKitties Game ║ $0.16 M ║
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║ 10 ║ LeBron James – NBA Top Shot ║ $0.1 M ║
╚════╩════════════════════════════════════════════╩════════════╝If instead of this abbreviated list of examples, I had made the decision to list ALL the recent NFT auctions in the last couple of days, the list would have been too long to even open in a normal browser. This is how big this phenomenon has become! And, at the moment, it’s growing exponentially!
The trend of people searching the term NFT, or non-fungible-tokens seems to only be growing, for now.
On a funnier note, I have always thought that, just as the Internet has been invaded during the past years by countless pictures of cats, there is only a question of time until the adorable furry pets bring exactly the same fate to the blockchain networks. And here we are: three entries in the list, to no one’s surprise, there are already some NFTs that represent cats! (There will surely be many more to follow in the days to come, and there is virtually nothing anyone can do to stop this.)
Close to the end of the list, the two kittens, Dragon Cat and Founder Cat are from one of the first blockchain-based games that leveraged the power of NFTs called Crypto Kitties. The game was designed to have crypto cats that are collectables, valuable, relatively based on how rare they were. The whole concept was centred around breeding the adorable creature, to obtain other little ones with super rare characteristics. The crypto-kitties craze from 2017 ended up clogging the Ethereum network for days, making all other blockchain transactions more expensive. Similar things tend to happen whenever there is something new and exciting built on top of Ethereum.
The NFT from line number is the tokenized version of the famous Nyan Cat, minted and auctioned by no other than the cat’s creator himself, Christopher Torres. Because the buyer is anonymous, I can only assume that the buyer bought the meme not for clout, but because he/she likes it. It might be that Torres just opened the door for a whole new meme economy in the crypto world.
Now on a more serious note, the $69 million NFT by Beeple mentioned at the top of the list is, (and I hope I am not mistaken, since things change so rapidly on this scene), the second most expensive art piece by a living artist, the first being a sculpture by Jeff Koons from 1986, auctioned for $91 million. It is probably the most expensive digital art piece in the world ever to be auctioned. However, even though the auction took place at the prestigious auction house Christie’s, the buyer is not a traditional art collector, but a blockchain angel investor named MetaKovan. It might take some time until we see old-school art collectors jumping in on this market.
There are many more stories I can mention here, from stories about non-fungible tokens that are physical like the MF Collection, to NFTs that don’t have any physical art behind them, like the Burned Banksy NFT (I would like to mention here that I don’t agree with burning physical art for the sake of promoting new a digital medium, and believe that another, less iconoclastic method could have been used to make the point). There are indeed many stories, some more amusing / interesting than others.
Depending on how you look at them, you can argue that the whole space is nothing but an immense joke (like the Emperor’s new clothes) or you can argue that this is the first chapter in something new, a valuable technical innovation that will remain in history. As with any technical innovation, when first introduced, there is indeed a trial and error time, and there definitely mistakes and blunders to be expected as part of the process.
Interesting current use-cases for VR, AR & 3D Games
The ability to store virtual things, in the CyberSpace, forever, has been the dream for many people for decades. If I am not mistaken, young Vitalik, the Ethereum creator, during his teenage years, was a World of Warcraft and StarCraft gamer.
One day he got fed up with Blizzard, for some reason, as the company decided to delete his achievements, making him realise that games are a waste of his time. A few years later, Vitalik Buterin ended up inventing Ethereum, the second largest public blockchain in the world, with lots of games on it that benefit from the immutable characteristic of blockchain. Probably this is the reason why the Ethereum logo looks like a pylon made by the protoss race from StarCraft!
It is well known that blockchain-based games that use NFTs have been around since 2017, however, only recently have they exploded in popularity. Apart from blockchain-based games that gravitate around card-like-collectibles (e.g., CryptoKitties), there is a new type, blockchain-based virtual world games. Usually, users have the option to buy and own parcels of land, which they can use to build things in the virtual space allocated to them. Some of them are more suitable for art exhibitions and artistic things (see Cryptovoxels). Others are geared towards exploring and socialising (see Decentraland). Last, but not least, some are perfect for gaming or immersive experiences (for example Sandbox which uses Voxels or SomniumSpace , which leverages the Unity SDK).
You might be making the comparison to the 2003 game Second Life ,but things are different here. Second Life failed primarily because the company who owned it, Linden Lab, never spent time to do any innovation and only focused on making money from advertising. Later, the advertisers started spending less for advertising in Second Life and more for advertising on the Facebook platform and later Twitter, meaning that Linden Lab had no money to innovate.
With blockchain-based virtual games, also called metaverses, things are a little bit different. Those are almost always community-led projects where game designers or asset creators are free to innovate. In theory, land parcels owners that are not interested in building assets on them could sell them to other creators that have innovative ideas, and so on. The consumers of virtual elements can also become producers, hence the potential for these platforms to become full of prosumers, or perhaps there should be a new term for them: creatigamer.
Existing VR gear producers / software providers should definitely keep an eye on those projects because who knows, maybe today this is a niche activity, but tomorrow who knows, it might become mainstream.
One last thing, as I said, I decided to put my money where my mouth is and minted my first NFT with the image from the first part. The result can be found here.
