WTF is ‘non-fungible’ — How NFT collectibles can kickstart crypto again.
$170,000. That’s how much a single Dragon, the most expensive CryptoKitty on record, was sold for in late 2017. A blockchain game which allows players to collect and breed digital cats, CryptoKitties caught fire during the raging bull market with a 4833 ETH (or more than $2million) daily volume of these novel tokens being traded at the height of the kitty mania. According to ETH gas station, CryptoKitties was responsible for 12% of Ethereum transactions at the time. We’ve come a long way since the scalability struggles of ’17 and crypto collectibles are finally ready to have a breakout season and reach mass adoption.
Fungible vs Non-Fungible
One bitcoin is worth one bitcoin. If you and I decide to ‘swap’ bitcoins and we each send each other one bitcoin at the same time, we’ll finish off with the same value we started off with. Same goes for Ether, DASH, DOGE or any other shitcoin that tickles your fancy. The property of these digital assets that make them interchangeable is known as ‘fungibility.’ Say that 10 times fast.
Non-Fungible Tokens, known by their lovable nickname NFTs are unique. NFTs open up the a whole new world, one where collectors can own digital goods that are truly theirs, unlike centralized systems whereby the asset they own is simply an address on someone else’s database. Instead of cryptocurrencies such as Bitcoin and Ethereum, imagine I am trying to build a fantasy football team on the blockchain. There can only be one Messi because, lets face it, he is the GOAT. A non-fungible ‘Messi’ token would be cryptographically unique — no-one would be able to forge or copy this token. If I get my hands on a Messi token, its mine until I decide to transfer it to someone else.
Which I’m not doing until he gets his statue outside the Camp Nou.
180,000 people spent about $20 million in ether in the first month of CryptoKitties’ life. Kitties are cute and all but what really gets me going is football, which is what led me to Sorare, a football collectibles game built on the Loom Network.
We Humans Love To Collect — For Me, It’s About Collecting Football Players on Sorare.Com
Some collect art, some collect stamps. King Henry the 8th collected wives. I collect sports cards. When I was a kid, getting home and unwrapping a packet of Panini was one of life’s greatest pleasures. Sorare digitizes this experience, allowing you to bid on a host of football players from some of the best leagues in the world and combine them to form your fantasy team. This is a dream come true for all you football fans out there. Not only can you indulge in some fantasy football, if you play the game well enough, you could make a little money on the side.
Built On Loom For Maximum Room
Ethereum can’t scale. That is the worse-kept secret in crypto. Its still pretty secure though. It has also developed the ERC-721 token standard which makes it really simple to create and deploy NFTs which is why the Loom team came up with the idea of hooking up applications to Ethereum in a creative way. Instead of running directly on Ethereum, decentralized applications (dApps) can us Loom to create their own blockchain which connects to Ethereum. The connection is done by means of Plasma technology, an interoperability mechanism linking a network of connected ‘side-chains’ together. Consensus on these Loom side-chains is achieved by delegated Proof of Stake, a voting-like system where token holders delegate validators who are then responsible for producing blocks and securing the network. Speaking of delegators and validators…
Cosmos + Loom = BFFE
If the NFTs market is to flourish, they should be able to trade for all sorts of crypto assets. I should be able to swap my Messi token for ETH, BTC or an NFT token from another game. Which is what makes Loom’s integration with Cosmos so exciting. Cosmos recently launched its mainnet with two priorities on its mind: scalability and interoperability. Similar to Loom, Cosmos envisions a network of ‘zone’ chains communicating with each other via a central ‘hub.’ It also runs a dPoS system, where token holders can make up to 20% in exchange for delegating toward validators. The integration with Loom means that any football player tokens I want to sell can be sold for Cosmos’ ATOM, which can then be ‘bonded’ to a validator in order to earn me interest.
Now that’s what I call music.