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SUMMARY ON NFTs

     


  WHAT IS AN NFT?


A non-fungible token (NFT) is a singular digital identity that cannot be duplicated, replaced, or divided. It is stored in a blockchain and is used to verify ownership and authenticity. [1] Since an NFT's ownership is tracked on the blockchain and is transferrable by the owner, it is possible to buy, sell, and exchange NFTs. NFTs can be made by anyone and don't necessarily need any coding knowledge. [2] Digital files including images, films, and audio are frequently referred to in NFTs. Unlike bitcoins, which are fungible, NFTs are uniquely identified assets.


The legal rights that an NFT conveys can be ambiguous, notwithstanding claims by NFT proponents that they offer a public certificate of validity or proof of ownership. A digital file's associated NFT does not necessarily come with copyright, intellectual property rights, or other legal rights, according to the blockchain's definition of ownership, which has no intrinsic legal meaning. The sharing or copying of a digital file that is associated with an NFT is not restricted, and NFTs that refer to the same digital file can still be created.


From 2020 to 2021, the NFT market surged significantly: from $82 million in 2020 to over $17 billion in 2021, the trading of NFTs climbed by 21,000%. [3] NFTs have been employed as speculative investments, and they have come under increasing fire for the energy use and carbon footprint associated with confirming blockchain transactions, as well as for their widespread use in art fraud. [4] The NFT market has sometimes been likened to a Ponzi scheme or an economic bubble. [5] The NFT market was predicted to start falling out by May 2022.


BRIEF HISTORY OF NFTs


In May 2014, Kevin McCoy and Anil Dash developed Quantum, the first known "NFT". It comprises of a video that Jennifer McCoy, McCoy's wife, created. At the New Museum in New York City, McCoy registered the film on the Namecoin network and sold it to Dash for $4. This transaction took place during a live presentation for the Seven on Seven conferences. The system was known as "monetized graphics" by McCoy and Dash. [25] Through on-chain metadata, this formally connected an art piece to a non-fungible, tradeable blockchain marker (enabled by Namecoin). In contrast, Counterparty and other blockchains use multi-unit, fungible "hued currencies" that lack metadata.


Three months after the debut of the Ethereum blockchain, in October 2015, the first NFT project, Etheria, was introduced and put on display at DEVCON 1 in London, Ethereum's first developer conference. The majority of Etheria's 457 hexagonal tiles that could be bought and traded remained unsold for more than five years until March 13, 2021, when a buying frenzy was spurred by rekindled interest in NFTs. All tiles from the previous and current versions, each hardcoded at 1 ETH (US$0.43 at launch), were sold for a combined total of US$1.4 million in less than 24 hours. [27]


Only after the launch of numerous NFT initiatives that year—the ERC-721 standard was initially put forth in 2017 via the Ethereum GitHub—did the word "NFT" come to be more widely used. [28][29] A number of NFT projects, including Curio Cards, CryptoPunks (a project to trade original cartoon characters created by the American studio Larva Labs on the Ethereum blockchain),[30][31] and rare Pepe trading cards, launched around the same time as the standard. [28] By offering tradable cat NFTs, the 2017 online game CryptoKitties became profitable, and its popularity raised awareness of NFTs.[32] 

In 2020, the NFT market expanded quickly, tripling in size to reach US$250 million.[33] NFTs cost more than US$200 million in the first three months of 2021.


There were three trademark applications for NFTs submitted to the USPTO in 2020. [35] By 2021, there were more than 1200 trademark applications. [36] There were 450 NFT-related trademark applications submitted to the USPTO in January 2022. [36] The NYSE, Star Trek, Panera, Walmart, Elvis Presley, Sports Illustrated, Ticketmaster, and Yahoo are among the numerous trademarks being filed for NFTs. [37] NFTs had a rise in popularity in the first few months of 2021 as a result of many high-profile sales and art auctions.


APPLICATION OF NFTs


GAMING: 

NFTs can stand in for in-game items like virtual parcels of land. If they can be exchanged on third-party marketplaces without the game developer's consent, some observers describe them as being controlled "by the user" rather than the game developer[58]. However, there has been a generally mixed response from game creators, with some, like Ubisoft, embracing the technology and others, like Valve and Microsoft, expressly forbidding it.


MUSIC:

According to reports, in February 2021, musicians sold their songs and artwork for NFT tokens, generating about US$25 million for the sector. [69] To mark the release of his Ultraviolet album three years earlier on February 28, 2021, electronic dance music artist 3LAU auctioned a collection of 33 NFTs for a total of US$11.7 million. To promote the Kings of Leon album When You See Yourself, an NFT was released on March 3, 2021. [72] Rapper Eminem, visual artist Shepard Fairey working with record producer Mike Dean,[77] rapper Lil Pump from the United States,[73][74][75] Grimes,[76] and rapper Lil Pump have all employed NFTs.

DIGITAL ARTS:

NFTs are frequently used in the context of digital art[40]. Notable auctions of NFTs associated with digital art have drawn a lot of public interest. The most expensive NFT was a piece titled Merge by artist Pak, which sold for US$91.8 million[41] at auction, while the second-most expensive piece was Everydays: the First 5000 Days by artist Mike Winkelmann (also known as Beeple), which will cost US$69.3 million in 2021.


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