Non-Fungible Tokens (NFTs) are the biggest craze in the current cryptocurrency market. Digital artwork, songs, and even sneakers are worth millions of dollars now.
NFTs have made a huge impact in several industries like art, music, gaming, e-commerce, financial services, entertainment, healthcare, tourism, and education. Both retail and institutional investors have been purchasing NFTs regularly. The market cap for Non-Fungible tokens crossed a whopping $338 million in 2020.
What are NFTs?
They are unique crypto tokens existing on different blockchain networks. Non-Fungible tokens cannot be interchanged with each other. The holder of the NFT retains exclusive ownership rights over it. NFTs are of limited supply and they can be increased by paying extra fees depending on the demand from investors in the market. NFTs can be securely stored by investors in digital wallets like MetaMask, Trust wallet, and Coinbase wallet.
Examining the direct relationship between NFT’s and the ERC-721 token standard
It is a uniform standard for NFT that was introduced in January 2018. Each NFT has a different contract address and token ID.
The ERC-721 token standard contains several functions for transfer of tokens, creation of tokens, burning of tokens, accurate real-time calculation of the token balance, and for knowing the information about the total supply of a token.
ERC-721 is an upgraded token standard over the ERC-20 and ERC-223 fungible token standards.
The holder of NFT can use the ERC-721 token standard to decide the scope of his ownership, the extent of content access provided to others, tokenize the content, and integrate it with other products and services.
The different advantages of developing ERC-721 tokens
It prevents copyright issues – Content creators, especially in the music and entertainment industry face issues of copyright infringement regularly. NFT’s help to avoid that as each token has a private key to protect it from misuse. The key acts as a uniform license preventing its unauthorized sale and transfer. The copyright can be legally transferred only on the insistence of the content creator.
Real-time surveillance – The ownership of the token which has already been validated in the NFT is constantly monitored by utilizing the API of Infura available on Web 3.0. This is highly beneficial for developers of DApps.
Scarcity can be ensured – For highly valuable and rare goods, the creators of NFT can limit its sale by offering ownership licenses only for a few people.
Easily transferable – The buyers of NFT’s can also resell it on NFT marketplaces like OpenSea, Rare Bits, and Rarible and fetch a high price.
Other benefits – Since NFT’s are completely based on cryptocurrencies, it brings more benefits like full decentralization, quick execution of peer-to-peer payments, non-interference of any middlemen, and a permissionless mechanism.
Efficient price discovery – Due to positive investor sentiment existing in the market now, there is a greater chance for NFT’s to be sold quickly leading to sufficient liquidity.
Assemble the required tech stack – Some of the technologies required are the InterPlanetary File System (IPFS), the Ganache block explorer, Truffle, a tool used for developing smart contracts and DApps, Node.js, the Visual Studio Code text editor, and the Pinata API key.
Hire knowledgeable blockchain developers – Developers well-versed with the Ethereum network will have to code the Ethereum-based smart contract. Tools such as OpenZeppelin based on the Solidity programming language must be used.
Name your NFT – Give your NFT a unique and innovative name and a contract symbol to easily distinguish it from other NFTs in the market.
Map the IPFS hashes with the crypto tokens – Each token mapped to an IPFS hash will be different from the other tokens. It contains details of the recipient of the NFT and the metadata associated with it.
Set up Ganache – Establish a migration file on Ganache and operate it from the desktop. Save it to deploy the contract for the associated assets with the NFT.
Add an asset for the NFT by utilizing the IPFS – NFT’s are known to support a variety of real-world assets like artwork, gaming rewards, paintings, and music albums. The Pinata new API key must be selected and the specific asset can be uploaded in no time.
Confirm if the asset exists on the IPFS network – The details of the unique IPFS Hash, Pin size, and the timestamp will be made available. This confirms that the asset has been added to the IPFS network successfully.
Verification of the digital asset – Once the assets have been saved to the peer-to-peer network of IPFS, any changes in its hash will be immediately notified to the holder of the NFT. This ensures that the digital asset is valid and the holder can also verify its ownership easily.
How to sell ERC-721 NFTs?
Crypto marketplaces like OpenSea act as a hub of digital collectibles.
Users can create an account on these platforms.
They can list their ERC-721 NFT for sale by mentioning details of the minimum bid and the expiry date and the time of bidding.
If there is a successful sale on the platform, the cryptos will be credited to the digital wallet of the users.
NFT’s will continue to strongly thrive in the market and break new records in the years to come. NFT marketplaces will witness a huge rise in demand, execution of transactions, and trading volume.
More attention has to be paid by investors to the factors influencing the price of the NFT as it can skyrocket quickly depending on the nature of market demand. The USP of NFT’s lie in its ease-of-usage as anyone without possessing any technical knowledge about cryptos can become an investor if they have enough funds.
Ethereum’s upgraded version in the form of Ethereum 2.0 would be a force to reckon with as it is based on the robust Proof-of-Stake (POS) consensus mechanism. Get started with ERC-721 development now for launching your own NFT soon.
Kickstart the development of cutting-edge ERC-721 based NFTs
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