Non-Fungible Tokens Overview

Goals

To have a broad understanding of non-fungible tokens (NFT) in order to help artists get acquainted with the space. Specifically, this will:
  • Provide basic information about the blockchain, the cryptocurrency ecosystem, and the NFT value proposition
  • Provide information that will serve as a guide in minting and selling NFTs, including average costs
  • The average costs can be in ETH. It doesn't have to be in USD
  • This will be provided as a summary with a list of sources which will include blog entries, articles, or YouTube videos

Early Findings

Data Availability

  • The initial hour of research indicates that data availability regarding non-fungible tokens is adequate.

The Blockchain

  • The blockchain is a certain kind of database or collection of information, wherein it stores data in groups or blocks that are chained together in chronological order. The blocks hold the set of data.
  • The blockchain has been most commonly used "as a ledger for transactions," although many other types of information can also be stored on the blockchain.
  • Blockchain transactions go through the approval of a "network of thousands of computers." This ensures that the verification process is free from any human involvement, resulting in a higher accuracy of information records. It also makes the system difficult or almost impossible to hack or change.
  • Blockchain is "the technology that underlies cryptocurrency, enabling it to exist as a secure method of moving and validating transactions and information." This is the technology needed in creating NFTs.

The Cryptocurrency Ecosystem

  • A cryptocurrency is a digital asset that serves as a medium of exchange. Cryptocurrencies have experienced exponential growth since 2009.
  • More than 3,000 cryptocurrencies have been active across the globe by October 2019. In 2018, the number of active cryptocurrencies was only 1,600.
  • The number of cryptocurrency users has also grown exponentially worldwide. In September 2016, there were only 8.9 million users, while in September 2019, there were already 42.3 million users.
  • Cryptocurrencies are essential in ensuring the future of digital finance because they are accessible, censorship-free, borderless, have lower costs, and offer greater security. Also, it allows individuals to have greater financial control of their funds.
  • As of the first quarter of 2021, the cryptocurrencies with the highest transaction volumes are stablecoins, ethereum, wrapped ethereum, and bitcoin.
  • The "ethereum blockchain is the basis for most of the currently offered NFTs because it supports the ERC-721 token standard, enabling NFT creators to capture information of relevance to their digital artifacts and store it as tokens on the blockchain."

NFT Value Proposition

  • NFTs have a subjective or speculative value. It is basically "worth what someone is willing to pay for it, which can be a lot if the NFT is made by a famous artist and the buyer is a wealthy collector."
  • An example of a famous artist that created an NFT is Mike Winkelmann or Beeple. Beeple's digital art was sold at $69 million in March 2021.

Summary

  • We have provided some information on the blockchain, the crypto-ecosystem, and the NFT value proposition. We did not have enough time to provide all the needed information, but we could do so with additional hours of research.
  • The geographic focus for this research is global.

Research proposal:

Only the project owner can select the next research path.
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