Introduction
NFT support has finally arrived on Ballet wallets!
But before we get into the details of this new functionality, perhaps it is important we take a brisk walk down the NFT rabbit hole. Despite the visceral explosion in NFT popularity in the past year, NFTs have actually been around since at least 2014. The original NFT protocol layers were built on the Bitcoin blockchain. The most well-known of these were Counterparty (XCP) and Mastercoin (rebranded to Omni in 2015). In those days, non-fungible tokens were most commonly referred to as “colored coins”. The original version of the U.S. dollar stablecoin Tether USD (USDT) was issued on the Bitcoin-based Omni protocol layer (new USDT tokens have subsequently been issued on the Ethereum and Tron blockchains).
As Ethereum’s popularity boomed in 2017 with the ability for token projects to mint tokens at rapid pace for near zero cost, so did the popularity of the ERC-20 standard, and specifically ERC-721, the cornerstone of what make s an NFT an NFT. Other blockchain networks do support their own NFT standard, but at the moment Ethereum gets all the fanfare. As transaction fees continue to rise on Ethereum, it is uncertain whether it will be able to maintain its dominant market share.
So what are NFTs?
In short, an NFT stands for Non-Fungible Token. In this piece, we will use Ethereum’s NFT standard token, the ERC721 standard. This means that every ERC-721 token is unique and different in identity due to its cryptographic link with a unique contract address on the Ethereum blockchain. The other popular token standard, ERC-20, is fungible. Each ERC-20 token (USDT or WBTC for example), is interchangeable with any equal amount of the same token. In the physical world, we are all familiar with the concept of fungibility; $1,000 of cash, a bar of gold, or a barrel of refined oil is interchangeable with any other equal amount of the same substance.
But not every ERC-721 token is fungible. This innovative way of differentiating a token has spawned the term NFT, which has then led to the burgeoning narrative of true private ownership of censorship free assets. In a digital world where copying/pasting is inevitable in one’s digital work, a NFT allows a creator to give some stamp of ownership to it on an immutable blockchain network.
Think of NFTs having the same advantages as normal cryptocurrencies (portability, permanent, liquidity, transparency) but with an added feature of having a unique “metatag” on it, being the unique digital image/text tethered to its private keys.
The Technical
From the official erc721.org website, the definition is as follows: ERC-721 is a free, open standard that describes how to build non-fungible or unique tokens on the Ethereum blockchain. While most tokens are fungible (every token is the same as every other token), ERC-721 tokens are all unique. Think of them like rare, one-of-a-kind collectables.
NFTs in essence can be virtually anything digital, such as your typed up essay, a tweet you posted out, an email. What makes it an NFT is its cryptographic signature, or ID, on a blockchain network.
Blockchain, in general, has also led the narratives of self-ownership but it was NFTs that made that possible. And despite the crypto winter bear market that the industry went through from 2018 to the first half of 2020, alot of development and infrastructure went into making the minting, curating, and holding of NFTs more accessible in 2021.
And where is one area of individual creativity and ownership that also seems to be conflicted? The music and arts industry. And that’s where the money is flowing into at the moment with hundreds, perhaps thousands, of artists in both realms are getting their feet wet with. From artists such as beeple, Kings of Leon, and many more starting to create their new work as NFTs, the manifestation of NFTs is real and is likely here to stay. The NFT is allowing individual creators and artists to acquire ownership protection to their work which is slated to help prevent digital fraud or theft.
Just earlier this year, Linkin Park’s Mike Shinoda became the first well recognized music artist to release a 75-second single as an NFT selling for over $8,000 each.
The ERC721 standard also allows permissionless functions to transfer ownership through its Solidity smart contract syntax code as shown in the below example:
What else has been going on in the NFT space?
Although many think this trend will die out in a matter of time, many also do realize the importance of self ownership and IP protection is utterly important in this day in age of cyber security.
CryptoKitties have been credited with becoming the first popular NFT project which actually caused the first major network congestion issue on the Ethereum blockchain. This subsequently saw ETH gas fees skyrocket at the same time price was jumping through the roof. At its peak, CryptoKitties saw about 5,000 ETH in trading volume, with Founder Cat #18 selling for 253 ETH ($110,000 at the time of sale).
This past year the NFT craze cryptopunks also exploded allowing one to animate themselves as a low pixelated figure with a slim neck to go along with it. Although they also were an early NFT project in 2017, it was until this year that they gained more popularity. Why? Because of the power of meme culture and the advent of this new crypto craze.
Earlier in May, prestigious auction house, Christie’s, sold a collection of the above nine CryptoPunks for over $16 million.
Ballet wallets have historically been able to support coins/tokens on our wallets. But as quick and adaptive one needs to be in this industry, we also have heard the call and have decided to follow the market demand. If NFTs are going to give a positive exposure to crypto, then it’s a win-win for all of us in the community.
At the moment we are only supporting the NFTs of CryptoPunks and CryptoKitties, which both were early ERC721 beta projects in the NFT space on Ethereum, as well as BoredApeYachtClub, but we do have more development plans to support other NFTs in the near future.
For those who do already have it, go ahead and share your CryptoPunk avatar of yours showing your true cryptopunk personality and show it off to your buddies on the Ballet Crypto app.
NFTs will continue to set the trend of digital creation and a record of ownership going forwards, and with this, Ballet also plans to support other types of NFTs on the Ballet Crypto app. As mentioned before, the past 2 years have been huge timeframes for the ecosystem to build out the infrastructure such as minting NFT platforms and even a Museum of Crypto Art where one could visit in virtual reality.
At the moment, this NFT explosion into the fine art world is on the verge of a parabolic growth upward. Platforms such as Dapp Radar, Dune, and Rarible have multiplied in usage and sales volumes of NFTs. The site, cryptoart.io, lists out some of the most expensive digital art pieces sold to date.
OpenSea, which is one of the most popular NFT marketplaces, shows the top 8 NFT collections pulling in an aggregate 7 day trading volume of 8,465 ETH and an all time aggregate volume of over 453,000 ETH (at time of writing that equates to over $1.2 B).
Snapshot from OpenSea listing the top NFTs by current 7 Day Volume (https://opensea.io/blog/guides/non-fungible-tokens/)
For NFT digital artwork alone, Mike Winkelmann, a graphic designer under the alias of beeple, has had the most expensive NFT arts sold with his top piece, EVERYDAYS: THE FIRST 5000 DAYS, being sold for over 25,819 ETH, about $69,346,250. And despite beeple’s huge popularity in the digital NFT artwork space, other digital artists are also making a name for themselves such as pak, xcopy, pplpleasr, and others.
Conclusion
“Traditional fine art had a $64B market in 2019, and investments made in fine artwork have had annualized returns of around 7% for the last 35 years. Knowing that, it’s not hard to recognize the potential of the digital art market to explode as NFTs become more and more available.” -Foundation Team (foundation.app)
Regardless of sector, such as artwork, music, blogging, etc, NFTs are here to stay as its value proposition is well intended in today’s digital world. It’s only inevitable that we will see more and more use cases of NFTs permeate other areas of the digital creative realm. As mentioned before, only CryptoKitties, CryptoPunks, and BoredApeYachtClub are currently supported on the Ballet Crypto app. But as we see the NFT landscape continue to evolve, we will also evolve our Ballet Crypto app to support more popular NFTs going forwards. Feel free to let us know which other NFTs you would like to see supported on the Ballet Crypto app!
Sources:
Ballet Blog 