Crypto art

You can translate into digital format not only paintings and drawings. On NTF marketplaces, the most popular are:

• Music files
• Memes
• Collectible alcohol
• Virtual real estate.

The authenticity of the artifact and the right of ownership guarantees a virtual certificate - a record with data that is entered into the blockchain. Information is stored in the public domain, and cannot be modified or deleted.

History

NFT technology has been known for several years, but it gained real popularity in 2020, when it began to sell virtual artifacts. The first non-replaceable tokens were created in 2014 by the Colored Coins and Counterparty team. The so-called "color coins" allowed developers to issue their own currencies as an add-on over the existing blockchain. The loudest project of the early NFT was a digital meme with the frog Pepe. At the beginning of 2018, this artifact was sold at auction for $38.5 thousand in cryptocurrency PepeCash.

In 2017, famous CryptoPunks were created - 10 thousand unique images tokenized as NFT in the Epherium blockchain. At first, the pictures were distributed for free, then they began to sell.

However, another project has advanced the technology of non-interchangeable tokens. The computer blockchain game CryptoKitties became mainstream at the end of 2017. Tens of thousands of people bought, bred and sold digital seals. At the peak of popularity, the capitalization of the project was 5 thousand. ETH. In December 2017, the number of operations in the game increased so much that they blocked the Ethereum network. New customers of virtual cats paid huge gas fees to make their transactions go faster. Prices for artifacts reached hundreds of thousands of dollars. In September 2018, one of the cats was sold for 600 ETH ($170 thousand at the time of the transaction). Over time, the excitement slept. In 2021, the volume of CryptoKitties does not exceed 50 EHT, and most digital pets cost about 0.045 ETH ($20.07).

The next stage in the development of technology was the tokenization of cryptographic art. There were marketplaces for creating and selling NFT.

NFT operating principle

Ordinary coins within the same network are interchangeable: they have the same value and attributes. Everything works differently with NFT. Each token is unique and cannot be copied. The identification data is contained in the asset code, and cannot be modified or deleted.

Most NFT tokens are released on the Ethereum network in the following standards:

• ERC-721 - An individual smart contract is used for each crypto asset
• ERC-1155 - You can create different types of tokens (interchangeable and non-interchangeable) on the same blockchain and transfer them between decentralized networks
• ERC-998 - connects the functions of two in one digital asset (for example, the rights to a game character and his equipment).