Abstract

NFTs are tokenized collectibles that are uniquely valuable due to their uniqueness and scarcity. They are widely used on Binance Smart Chain (BSC) and Ethereum. popular. The value of NFT comes from authenticity and scarcity. Therefore, it may be helpful to learn more about the coin through a blockchain explorer.

The use cases of NFT are not limited to digital currency artworks, and Binance Smart Chain (BSC) has launched a highly innovative non-fungible token ecosystem. Given the recent popularity of NFTs in the news and their high selling prices, it’s easy to see similarities to the 2017 ICO craze. However, the two are actually very different.  

To deepen understanding, we will introduce the basics of NFT based on common misunderstandings and frequently asked questions.

Introduction

When talking about non-fungible tokens (NFT), art is usually mentioned items and collectibles. Graphic designers and visual artists became the beneficiaries, and these unique tokens created a huge sales boom for their works. The artist Beeple is a typical example of a household name.

NFT is indeed hot, but the depth of this topic is far more than what is introduced in the headlines. If you want to delve deeper into this field, you need to understand and explore the world of NFT. NFT has its footprints in many places, has many use cases, and there are many misunderstandings that need to be clarified.

What is a non-fungible token (NFT)?

NFT is a digital currency asset using blockchain technology, which reflects uniqueness and collectible value. The reason why NFTs are so popular is that they are created by famous artists or world-class musicians. Such tokens are also useful for gaming or collecting collectibles.

You may have heard of NBA Top Shots. This is a digital collectible themed around the basketball card game. These cards play the same way as physical trading cards, but blockchain technology can effectively guarantee their authenticity. Some cards are very rare, and each card has a different value.

In short, non-fungible tokens cannot be counterfeited or copied. If we understand the definition of Fungibility, we will deeply understand the uniqueness of NFT:

Fungibility is the ability of the same type of assets to be replaced with each other.

For example, two Bitcoins have the same value and can be exchanged for each other. Instead, this #1/99 Keldon Johnson Holo Icon Top Shot card is unique and not interchangeable.

What can NFT do? Can it be traded?

NFTs come in all shapes and sizes, and even have many different use cases. If it is a purely digital art collection NFT, its practicality is very limited. Of course, you can also trade it, but an NFT of a photo is not much different in terms of practicality than a regular print.

However, some NFTs have practical uses in games, such as the famous game "CryptoKitties" in the Ethereum blockchain. In this game, collectible kittens can be bred to pass on their traits to future generations.

NFT is also widely used in financial platforms. PancakeSwap's NFT is very artistic and can be converted into digital currency, which has a huge market. This unique combination allows users to speculate on the price movement of cashable amounts.  

What these NFTs have in common is that they can be exchanged for other digital assets through transactions. That is, NFTs can be bought and sold using Ethereum, Binance Coin, or other digital currencies. However, the value of each NFT is unique (i.e. not interchangeable).

How to determine the scarcity and value of NFT?

The value of an NFT depends on what it represents. In the case of digital currency art, the measure of value is very similar to any other type of art. We need to consider the creator, the artistic value of the work, and the demand from various collectors.

If the NFT is issued in limited quantities or is part of a series of collectibles, NFTs with specific numbers are usually more collectible. #1 is usually the most popular, but special numbers like #13 or #7 are also worth collecting. Value and scarcity depend on a range of factors, including those mentioned above. These Top Shot NFTs prove the impact of serial numbers on prices.

For game-themed NFTs, specific NFT items or creatures will create economic benefits. If they net you $100 in additional staking rewards, they will be worth at least $100 without taking into account the artistic value.

PancakeSwap’s NFT is slightly different. A portion of its tokens can be converted into CAKE, the platform’s cryptocurrency. For example, if a cute and cute bunny NFT can reward you with 10 CAKEs and the unit price of CAKE is $20, its value is at least $200.

Where can I get NFT?

If you want to explore the NFTs available in the market, there are a few different avenues to choose from. The NFT market sells numerous non-fungible tokens, created by both famous artists and amateurs. Among the many products, the largest are NFTOpenSea based on Ethereum and Treasureland or BakerySwap on Binance Smart Chain.

New market platforms are constantly being launched, and the best among them stand out from the fierce competition. If interested in purchasing works by famous artists, be sure to verify the authenticity of the market. You can also find NFTs by playing blockchain games or participating in decentralized finance (DeFi) projects.

What are the major NFT projects on Binance Smart Chain?

Binance Smart Chain benefits from the healthy development of the NFT community in the blockchain, and its business is not limited to art and general markets. NFT games and even collectibles with staking rewards or financial gains are highlights of Binance Smart Chain.

As mentioned earlier, BakerySwap and Treasureland are the two largest NFT trading platforms. The former also allows users to quickly create NFTs at reasonable prices. Both platforms are excellent ways to demonstrate the artistic value and creativity of NFT.

Blockchain games such as "Battle Pets" and DeFi protocols that experiment with NFT through more financial methods are gradually coming into our view. PancakeSwap’s NFT transaction volume ranks first in Treasureland, making it a large-scale project with extremely high NFT usage. Click this link to learn more about these NFT projects.

Is NFT the new ICO?

In short, no. While NFTs and ICOs are both capable of raising funds and have received a lot of hype lately, the similarities end there. An Initial Coin Offering (ICO) is a method of raising funds for a project by selling its tokens. This activity started around 2017, but numerous scams emerged and many projects ended hastily, leading to its disrepute.

It is not difficult to understand why some people think that NFT is similar to ICO. Recently, these digital collectibles have been selling for millions of dollars. They appear frequently in media reports and are seen as a good opportunity to "make easy money" through digital currencies. These two points are the similarities between NFT and ICO. However, in order to stay away from illegal projects, it is crucial to do your own research before taking the plunge.

How to verify the authenticity of NFT?

Proving the legitimacy of NFT is difficult and depends on the specific verification content. There will undoubtedly be people who upload other artists' work and pretend to be the owners. In this case, you must check with the artist to confirm that they are selling NFTs of their work.  

The creator of the NFT should also provide you with some kind of identification for inspection and verification. Most verifications require viewing the NFT through a blockchain browser (such as BscScan). When it comes to blockchain, we adopt a "refuse to trust, verify for yourself" approach.

Valid information includes the minting date and the wallet address where the corresponding NFT was minted. You can also see if the NFT matches based on the transaction history ID. This method is more reliable than simply examining photos or documents associated with the collection. When looking at the recent sales data of digital artist Beeple, you can see that Christie's auction house details the token ID, token contract, and wallet address for verification and inquiry.

Sometimes a link to a file or an IPFS link is provided to verify the basic content. However, counterfeit coin makers can also fake both. In most cases, it is recommended that you contact the creator first.

Summary

Today, new use cases and development cases are constantly emerging in the NFT field. Don’t forget, this new technology just came out in 2017 and is still in its infancy. Before investing in these tokens, you must have a clear and accurate understanding of the new field you are entering and how the tokens will be used. Our impression of NFT may still remain in works of art, but it is being widely used in many projects in different ways.