By now, you’ve likely heard a thing or two about these mystical, magical internet pictures of cartoon animals that are turning average people like you and me into multi-millionaires overnight. You may have also heard that some of the biggest names in pop culture are getting into NFTs, too. People like Paris Hilton, Snoop Dogg, Ellen DeGeneres, Tony Hawk, and Jay-Z, as well as multi-billion dollar corporations such as Nike, Coca-Cola, the NBA even McDonalds!
The first response I had when I started hearing about NFTs and all the money being made off of them, was to take to the internet to try to understand, once-and-for-all, what all the rage was about. After reading through a couple of articles and watching a YouTube video or two, I still couldn’t wrap my head around what an NFT truly was and how they had value. If you find yourself in a similar position, hopefully, this article will set you straight. Let’s start by breaking down the term.
What is an NFT?
NFT is an acronym that stands for Non-Fungible Token. We know that “non” is a prefix meaning “not”.
A quick search of the Oxford Dictionary tells us that something which is fungible is “able to replace or be replaced by another identical item”. It is “mutually interchangeable”.
The easiest way to understand this concept is to think of fiat currency. If I have 5 one-dollar bills, and I want to buy a candy bar from the store, I can use any one of the five bills, because they all carry the same value. The cashier doesn’t care which of my $1 bills I hand her, because they’re interchangeable. They all have a value of $1, they’re all green, and they were all printed by the Federal Reserve. They are fungible.
With that knowledge, we can deduce that something which is “non-fungible”, such as an NFT, can not be replaced by another identical item.
What can be an NFT?
Just about anything you can imagine can be an NFT: exclusive music, the contract to your home, a concert ticket, your medical records, the original “Charlie Bit My Finger” video from the early days of YouTube, a celebrity’s Tweet, or a $3 Million picture of an ape to be used as your profile pic on Twitter. An NFT version of each of the above-mentioned items would all have one thing in common. Nobody else can ever have the exact same one as you.
“But”, you say, “I can save a few million dollars on the ape picture by just right-clicking and saving to my desktop! I’ve beaten the system! People are stupid for spending millions of dollars on pictures of cartoon animals.” And you’d be partially correct. You can save the picture to your desktop, but you’ll only have a copy of the original NFT.
Diving more into NFTs
Imagine this: You’re on vacation in Paris and you decide to visit the Louvre. You get to see the Mona Lisa in person and, as underwhelming as it may have been (if you’ve seen it, you’ll know what I mean), you decide that you’d like to hang the Mona Lisa in your house, so you stop at the gift shop on your way out and pick one up. When you finally get home, you hang the picture on your wall. Voilà! You now have the Mona Lisa hanging in your home!
Except you don’t. And you never will, because there is only one Mona Lisa and it is still hanging in the Louvre. You have an imitation. A copy. A nearly valueless representation of the original.
The same is true for NFTs. You can have as many copies as you want, but unless the original token was transferred to your crypto wallet, you don’t own the NFT.
How can you tell the difference between an original NFT and an imitation if the image is identical?
One of the most attractive features of NFTs for collectors and artists alike, is that they reside on the blockchain: a digital ledger that allows anybody and everybody to track the entire history of the NFT. On the blockchain, we can see information like who created the token and when, how many times it has traded hands, and even how much it was sold for in each trade. There is no way to hide this info, and no way to fake it.
What makes them so valuable?
There is a multitude of things that could contribute to the value of an NFT, most notably their scarcity and the overall strength of the community backing them. Another major factor that can add to the value of an NFT, is its utility. Is it useful? As I mentioned before, there are an infinite number of ways they can be utilized, but I’d like to share one of my favourite use cases for NFTs: Play-2-Earn (P2E) gaming.
Will Piccolo token dive into the world of NFTs?
To explain this further, let’s take a look at one of my personal crypto projects, Piccolo [$PINU]. Piccolo is an excellent example of a project that has been building its entire product line around ensuring that its NFTs have utility. The team has been working diligently with top game studio, Larva Games, to develop a P2E trading card game in which players will be able to use their cards, which are NFTs, to battle friends or strangers on a virtual battlefield, and here’s the kicker: players will be able to make actual money by simply playing the game. Much like popular trading card games Pokemon and Yu-Gi-Oh, the cards will vary in rarity. The rarer the card, the more powerful it will be and the more one will be able to sell it for on the secondary market. NFT owners will also be able to give their NFTs potions to increase their overall power and, ultimately, their value.
To make things even more exciting, Piccolo recently made a massive purchase of virtual land in the Sandbox metaverse next to the legendary gaming giant, Atari. As a result, players will be able to make money battling their foes in a mind-blowing virtual reality experience. But wait, there’s more!
When does Piccolo team plan to have it's own NFTs?
15th February 2022 will have the release of 10,000 3D NFTs. The Piccolo team will also be releasing an entire collection of 3D NFTs which will be used as playable characters in the game as well as allowing holders to stake said NFTs to earn passive income even when they aren’t playing the game! The crypto world is currently witnessing an intense race to the P2E throne, and Piccolo is leading that charge.
Alright. I think I’ve said everything I wanted to say. Hopefully, you can all walk away from this article with a basic understanding of what NFTs are, how they work, and where some of their value comes from. I even threw in some bonus info on one of the best projects to research in the NFT/P2E space for those who made it to the end of this article.
There’s a lot more to learn about NFTs in general and how to profit from trading them. As always, the more research you do into the topic, the better off you’ll be, and the more excited you’ll be for what the future of NFTs has in store for early adopters and the masses alike. Now close this window, get out there and get trading! A virtual world of opportunity awaits those who put forth the effort.
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Article by Austin Astral (Piccolo Team)