One of the most interesting features of technology is its power to persuade people and change their perception. We, humans, are traders by birth, and with technology at our feet, the face of the world has significantly changed. And more so, it has changed the way we value things. Take for instance this tweet by Twitter CEO Jack Dorsery. His tweet was put up on sale on Valuables by Cent, a portal that enables Twitter users to bid and buy tweets in the form of Non-Fungible Tokens (NFTs).
This article will enlighten you about all this and more.
What are NFTs
Non Fungible Tokens are digital assets that are unique and cannot be directly interchanged with other assets. Every NFT, which is sort of like an autographed item, is made of metadata, which gives them their individuality. Its digital content is linked to the blockchain. NFTs are a form of cryptocurrency like Bitcoin, where instead of money, they host assets like tweet, text, image, MP3, artwork, domain names, trading cards, game items, etc. It all began in 2017, when CryptoPunks, developed by Larva Labs, released one of the first NFTs. It consisted of around 10,000 collectables which were unique and based on the Ethereum blockchain.
NFT tokens can be transferred between various decentralized applications. Creating the tokens depends on the ERC-721, ERC-1155 and a few other standards. ERC-721 is a standard that represents the ownership of a unique NFT. It is a smart contract standard where developers follow the same template or format, which makes the code more universal. The ERC-1155 allows the creation of fungible, semi-fungible and non-fungible tokens in one single token standard. This changes the face of trade and recolonizes the financial segment by giving people a great sense of digital item ownership.
Why NFTs are so popular?
Although this concept is just in its nascent stages, in 2018 the market cap for global transactions of NFTs was $40.96, and in 2020 it grew manifold from $141.56 million (2019) to $338.04 million in 2020. Token-based sales have reached a new height of success in the recent past. And the launch of the NFT marketplace is making dreams come true for many. The number of active buyers in 2020, has increased by 57 percent, from 51,861 in 2018. The year 2021, is a year where almost everyone is talking about NFTs. OpenSea, a peer-to-peer marketplace for rare digital items and crypto collectables, recorded a monthly sale of over $95 million. And the trading volume on Ethereum amounted to more than $400 million. The icing on the cake is, for the consequent trades, the creator gets a royalty payment. So, what makes NFT special?
NFT Marketplace, now what is that?
In literal terms, a market is a place, area, composition of systems, institutions, social relations, etc., where people can sell and purchase good or where parties engage in exchange. Taking inspiration from this concept are NFT Marketplaces. It is a platform for one all - creators, artists, and buyers. This software allows people to trade in NFTs and crypto collectables. The crypto assets here come with digital ownership. Some of the top NFT Marketplaces are OpenSea, Rarible, KnownOrigin, SuperRare and AtomicMarket.
Attributes that make for a great marketplace
Technically, most marketplaces function in the same way. However, their uniqueness is what gives them an edge over others. Here is how the client-side of the NFT Marketplace works:
How to create a marketplace?
The foundation of the marketplace strengthens once you have decided on the domains that will feature on your storefront. One should also understand why they are developing the platform, who are its potential buyers and seller, what problems will the platform solve and the desired outcome.
Technology required to create the marketplace
Apart from the essential ERC 721 and 1155, you will also need:
Ethereum is the most popular platform for NFT marketplaces. Second is, Tezos. As per their website, they are an open-source blockchain network that can execute peer-to-peer transactions and serve as a platform for deploying smart contracts. Lastly, Flow is also widely used to create a marketplace using Cadence programming language.
Love it or hate it, but you can't ignore NFTs. It is said the current version of NFTs will continue to evolve, and for it, even the sky is not the limit. Although NFTs are now mainstream, it is claimed that they have been around 2012. And since they have grown leaps and bounds. They have gained importance owing to their nature of the options they provide.
Hope this article has cleared all your doubts. Has it left you curious and wondering ‘how can you set up a marketplace’? Well, don’t worry our team has got you covered.
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