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Cryptocurrency 101: A Beginner’s Guide to Understanding Digital Currency
Cryptocurrency is a digital or virtual form of currency that uses encryption techniques to regulate its generation and transfer. It operates independently of a central bank and is decentralized, meaning it’s not controlled by a single entity or government. In this guide, we’ll cover the basics of cryptocurrency and help you understand this rapidly evolving industry.
What is Cryptocurrency?
Cryptocurrency is a digital asset that uses cryptography to secure its transactions and control the creation of new units. Unlike traditional currencies, which are backed by a government, cryptocurrency operates independently and is not subject to the same regulations or restrictions. The most well-known cryptocurrency is Bitcoin, but there are now thousands of other cryptocurrencies in circulation.
How does Cryptocurrency work?
Cryptocurrency operates using a decentralized system known as a blockchain. A blockchain is a digital ledger that records all transactions and ensures that they’re accurate and secure. Each transaction is verified by a network of computers around the world, and once it’s confirmed, it’s added to the blockchain. Because each block in the chain contains information about all previous transactions, it’s virtually impossible to tamper with the system without being detected.
Why use Cryptocurrency?
Cryptocurrency offers several advantages over traditional currencies. For one, it’s completely decentralized, meaning there’s no central authority controlling it. This makes it more resistant to censorship or manipulation by governments or other organizations. Additionally, transactions can be completed quickly and at low cost, without the need for intermediaries like banks or payment processors.
Investing in Cryptocurrency
Many people are interested in investing in cryptocurrency as a way to diversify their portfolio and potentially earn high returns. However, it’s important to understand that cryptocurrency is a highly speculative and volatile asset, and there’s a risk of losing your entire investment. Before investing, make sure you do your research and understand the risks involved.
Conclusion
Cryptocurrency is a fascinating and complex topic that’s still evolving. While it may seem confusing at first, it’s important to understand the basics of digital currency as it continues to gain popularity and acceptance. Whether you’re interested in investing in cryptocurrency or simply curious about how it works, there’s no denying that it’s changing the way we think about money and finance.
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What are AI Tokens and 7 AI Crypto Projects to Watch
Key Takeaways:
- The growth and capabilities of AI has became even more mainstream now with the successful and popular launch of an AI chat bot called ChatGPT.
- As AI and blockchain infrastructure continues to develop, it is only a matter of time before they intersect and AI starts interacting with blockchains directly.
- Some applications and use cases of AI include decentralized AI marketplaces, AI-powered portfolio management, image generation, and more.
- It is worth exploring and understanding AI tokens while the AI blockchain ecosystem is still nascent and under a billion in marketcap as there may be interesting opportunities.
The growth of Artificial Intelligence (AI) has been exponential in recent years, and its integration with the world of cryptocurrency is only a matter of time. ChatGPT is enjoying mainstream popularity, and the competition between Google and Microsoft is heating up with the announcement of Microsoft investing $10 billion into OpenAI and Google’s development of its own AI chatbot, Bard. This has led to a rise in interest in AI crypto coins and tokens, with prices of certain tokens increasing by up to 16 times.
Based on the potential of ChatGPT, in the future, it might be possible for an AI to interact directly on the blockchain, and have the ability to hold, spend, and invest cryptocurrency for its users. Since ChatGPT’s release in June 2020, it has continued to improve and is now one of the largest and most advanced language models in the world, with the ability to generate human-like text and perform a wide range of language tasks like question-answering, text generation, text summarization, and more.
After all, when ChatGPT’s AI was asked what it would do with money, its reply was pretty interesting. It mentioned many similarities with what humans require money for: investment, self-presevation, acquiring more resources, and more, which suggests that it would be possible to train an AI to make investment decisions based on human goals.
In this article, we will explore the concept of AI tokens in the cryptocurrency market, including their types, use cases, and current state.
What are AI Crypto Tokens?
AI is a rapidly growing field that has the potential to change the way we live, work, and interact with each other. In the context of cryptocurrency, AI can be used to improve everything, from security and scalability to user experience and market prediction. This offers developers a revolutionary new platform to design and build applications and services, with the potential of creating a more efficient and transparent system. With the right training data, it can be trained to do anything, from identifying investment opportunities to detecting illicit activities.
AI tokens are cryptocurrencies that are designed to be power AI-related projects, apps, and services, such as decentralized AI marketplaces, AI-powered portfolio management, predictions, image generation, path finding, autonomous organizations, and more. These tokens may confer governance rights on their holders, or they are needed to pay for transactions on the AI platform.
Examples and Use cases for AI tokens
We’ve picked out a variety of AI tokens across a range of protocols with different use cases within the AI space. Let’s see how they work.
SingularityNET: Decentralized AI Marketplaces
What is it:
Decentralized AI marketplaces are places where people can buy and sell services and products related to AI in a decentralized way, using AI tokens as the main form of payment.
Launched in December 2017, SingularityNET aims to create a decentralized platform for AI services. SingularityNET is a decentralized, open-source blockchain marketplace that allows anyone to create, share, and monetize AI services at scale. It allows for a wide range of AI-based services to be shared and exchanged, such as natural language processing, computer vision, and predictive analytics.
In addition to being a marketplace for AI-services, it is also a marketplace for the exchange of data, models, and other resources needed to train and improve AI models. The platform’s goal is to democratize access to AI and to create a decentralized AI ecosystem where anyone can participate and benefit.
Token Utility:
AI developers can offer their services and users can access those services using the SingularityNET token, AGIX, as the main form of payment.
Fetch: AI Tooling and Infrastructure
What is it:
AI infrastructure is the hardware, software, data, computing resources, and other things that are needed to build, deploy, and keep AI systems running.
Fetch is a platform that provides the tools and infrastructure needed to build an AI-based digital economy, helping to connect people, devices and services, enabling the sharing of data and cooperation. Launched in June 2019, it is a decentralized platform for building and deploying autonomous agents that can be used for a wide range of applications such as supply chain management, logistics, and decentralized finance (DeFi).
The platform helps users build and deploy intelligent and autonomous software agents that can cooperate to provide services to individuals, companies, governments, and other organizations. These agents can interact with each other and with the real world, to perform tasks such as data analysis, prediction, and decision-making.
Token Utility:
Services provided by Fetch.ai are paid in the FET token, their cryptocurrency which is the main medium of exchange within the Fetch.ai ecosystem.
Ocean: Private Data for Building AI Models
What is it:
Private data is considered the most valuable due to its potential to improve research and business outcomes; however, concerns over privacy and control make it difficult to access.
Ocean Protocol’s Compute-to-Data addresses this issue by granting specific access to private data rather than directly sharing it, enabling the data to be used while still maintaining privacy and control.
Ocean Protocol was launched in November 2018, and it aims to make it easy to share and monetize data while ensuring data privacy. On the Ocean platform, data owners can approve the use of AI algorithms on their data, allowing for the training of AI models that can lead to improved predictive accuracy of models and other benefits without compromising the privacy of the data.
Token Utility:
The OCEAN token serves as the utility token on the Ocean Protocol, it can be used for staking on data curation and for buying and selling data on the Ocean marketplace.
Numerai: AI-based Portfolio Management
What is it:
AI-based portfolio management refers to the use of AI algorithms and techniques to manage and optimize investment portfolios. This can include a wide range of activities such as asset selection, risk management, and portfolio rebalancing.
Numerai was launched in 2015 and is a decentralized, artificial intelligence-powered hedge fund that uses machine learning algorithms to make investment decisions.The platform uses a unique approach as it crowdsources predictions from a global community of data scientists and rewards them with its native token, Numeraire (NMR), for making accurate predictions. Numerai then uses these predictions to drive its own trading algorithms.
It is built on the Ethereum blockchain and uses a combination of blockchain and AI technologies to create a decentralized, secure, and transparent system for making predictions and managing investments.
Numerai also allows data scientists to test and refine their models on a confidential and anonymous dataset, while ensuring data security and privacy. Numerai aims to create a more efficient and fair financial system by leveraging the collective intelligence of the community and the power of AI.
Token Utility:
The NMR token is used as a means of incentivizing data scientists to submit accurate predictions to the platform, and as a means of accessing the platform’s services.
Oraichain: Oracle Solution for AI data
What is it:
Smart contracts can currently only access data within their own blockchain and must rely on oracles to access external data from the real world or other platforms in order to perform a wider range of tasks. An oracle is a way for smart contracts to get data and information from the outside world.
Oraichain, launched in 2020, is a blockchain-based ecosystem for decentralized AI, and uses AI and blockchain to create a secure, transparent, and decentralized infrastructure for building and deploying AI applications.
One of the key features of the Oraichain platform is its oracle solution for AI APIs. Its architecture is designed to focus more on AI data sources, allowing for the integration of AI data and services into smart contracts.
This would enable the creation of decentralized applications (dApps) that utilize AI capabilities and the creation of a wider range of AI-based services, such as natural language processing, computer vision, and predictive analytics, and enables the exchange of these services among the participants in the ecosystem.
Token Utility:
Apart from staking and governance, the ORAI token is required in order to run an AI request sent to the Oraichain network.
Alethea AI: AI-powered Image Generator
What is it:
An AI-powered image generator helps to generate new images based on inputs from the user. It can be used for creating digital art, advertising, or even video game assets.
Alethea was launched in 2021 and is an AI-powered image generator based on user input. Alethea AI has introduced CharacterGPT, a Multimodal AI System that generates interactive AI Characters on the blockchain from a description in natural language. In short, CharacterGPT enables Text-to-Character creation.
These AI characters exist on the blockchain as NFTs, and their owners can upgrade their intelligence or be trained in specialized domains, while these NFTs can generate and own AI assets that exist on the protocol.
Token Utility:
The AI Protocol utilizes the Artificial Liquid Intelligence (ALI) token to generate these AI character NFTs, upgrade them, and more, on top of being used for governance and to incentivize the various participants of the AI Protocol.
Hera: AI-powered Pathfinder
What is it:
A pathfinder is an algorithm or system that helps users find the most efficient and profitable trade path when trading on Decentralized Exchanges (DEX).
Hera was launched in 2022 and is a pathfinder algorithm that helps users find the most efficient and profitable trade path when trading on DEXes. The Hera aggregator uses an AI-powered pathfinder which uses machine learning algorithms to analyze trading volumes, prices, and liquidity, to identify the best route for a trade.
This could include identifying the most efficient trading pairs to use and the optimal amounts to trade in order to reduce slippage, which is the difference between the expected price of a trade and the actual executed price.
The team started on the Metis network; however they are going multichain in 2023 and aims to launch on Arbitrum next.
Token Utility:
The Hera token currently shares the protocol revenue and allows for participation in the governance of the project, but in the future will be launching swap fee reduction and airdrops based on the usage of their DEX aggregator.
Current state of AI tokens
The market size of AI tokens in the cryptocurrency market is still relatively small at around $1.6 billion; however, the intrinsic demand of AI tokens are not yet clear as it is still a nascent industry, potentially resulting in rampant speculation during its early days.
However, it is expected to grow significantly in the coming years as more and more projects and companies begin to explore the use of AI in the crypto space.
Challenges and Opportunities in the AI Space
The AI token market is still in its early stages of development and faces several challenges that could impact its growth and adoption.
One of the major challenges is regulatory uncertainty, as there is currently a lack of clear and consistent regulations surrounding the cryptocurrency market, which includes AI tokens. As it is difficult to predict the regulatory landscape in the future and how it may impact the value and usability of AI tokens, this creates challenges for projects and investors as it acts as a deterrence.
Another challenge facing the AI token market is a lack of awareness among the general public. Despite the potential benefits of AI and blockchain technology, many people are still unfamiliar with the concept of AI and cryptocurrency and how they work, and combining them together makes it more complicated. This lack of understanding can make it difficult for projects to attract investment and for the market to grow.
As the AI token market consists of both AI and cryptocurrency, it can face competition from both sides of the market that it belongs to, cryptocurrency and AI projects. Individually, crypto and AI are both highly competitive industries with many projects vying for attention and investment. Combining them could make it harder for individual projects to stand out and attract investment.
Despite these challenges, there are also many opportunities for growth and innovation in the AI token market. For example, the decentralized and secure nature of blockchain technology makes it ideal for building AI applications that need to protect sensitive data and ensure privacy.
Additionally, the integration of AI and blockchain technology has the potential to bring new and innovative solutions such as an AI-driven DAO and other applications as mentioned above. As the market continues to evolve and mature, there will likely be increasing demand for AI tokens and new opportunities for growth and innovation.
Conclusion
The current demand based on the utility of AI tokens is unclear. That said, the future outlook for AI tokens in the cryptocurrency market appears to be bright, with many experts predicting significant growth in the coming years and most tokens in the space adopting an upwards trend (as of time of writing).
AI tokens in the cryptocurrency market have the potential to revolutionize the way we think about decentralized AI marketplaces, portfolio management, and even AI-powered autonomous organizations.
However, as with any emerging technology, there are challenges to be faced and opportunities to be seized. As the market continues to evolve, it will be important to keep an eye on key players and projects, and to understand the potential impact of regulatory changes.
With the recent success of OpenAI, and Microsoft’s large investment into them, it is clear that AI is here to stay. AI’s integration with cryptocurrency still remains to be seen, but it will be exciting to see how these technologies work together to shape the world we live in.
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10 Best Crypto and NFT Podcasts to Learn About Crypto in 2023
Key Takeaways:
- The list of best crypto and NFT podcasts to listen to in 2023 includes Blockcrunch, What Bitcoin Did, Unchained, Bankless, Rugradio, The Scoop, GreenPill, A16z, NGMI, UpOnly, and CoinGecko Podcasts, which cover cryptocurrency projects, DeFi, NFTs, thought leadership, and more.
- These podcasts are ideal for entertainment and learning and will keep you up-to-date with the evolving Web3 landscape wherever you are and whatever you are doing – exercising, commuting, walking your pet, etc.
Though crypto and non-fungible tokens (NFTs) are becoming mainstream, blockchain technology is in a constant state of development. With the crypto and NFT landscapes rapidly growing, along with the increasing popularity of DeFi, investors and enthusiasts need to keep abreast of industry news and trends. If you enjoy listening to podcasts on Spotify, Apple, Google, or other platforms, you’ll love our list of the top 10 crypto and NFT podcasts to follow in 2023. Regardless of whether you are new to the world of crypto and NFTs, or whether you are an expert, you’ll find a podcast that will provide you with new insights into the crypto space.
Let’s get started.
1. Blockcrunch: The Go-to Podcast for Crypto Native Investors
Blockcrunch is a cryptocurrency-native podcast for decentralized finance (DeFi), NFTs, and Web3. Jason Choi, a blockchain entrepreneur and investor, has been hosting the podcast since 2018. It focuses on the latest news, developments, and projects in the space. In addition to discussing current events, the podcast also delves into the history of blockchain technology. Notable coverage includes interviews with industry leaders and experts on the state of the market, along with discussions of specific projects and companies within the blockchain space. Overall, Blockcrunch aims to provide a comprehensive and in-depth look at the blockchain industry for enthusiasts and newcomers alike, while putting the spotlight on interesting projects and what they’re doing in the crypto space.
2. The What Bitcoin Did Podcast: The #1 Bitcoin Podcast
What Bitcoin Did is a tri-weekly podcast show hosted by Peter McCormack, a well-known figure in the cryptocurrency industry. The podcast covers a wide range of topics related to crypto and NFTs, including the latest news and developments in the space, and in-depth analysis and critical examination of the various issues and controversies surrounding bitcoin. McCormack invites various experts and industry leaders as guests, providing listeners with diverse perspectives on the crypto world. Other topics covered on the What Bitcoin Did podcast includes geopolitics, social justice, and nuclear power.
Notable coverage includes interviews with crypto industry names such as Andreas Antonopoulos, Adam Back, and Saifedean Ammous.
3. Unchained: Your No-Hype Resource on All Things Crypto
Unchained is a crypto podcast hosted by former Forbes senior editor Laura Shin. The podcast is based on cryptocurrencies and blockchain technology, focusing on the latest news. Shin interviews a wide range of experts and professionals in the field, including entrepreneurs, investors, and academics, to provide in-depth analysis and perspective on the rapidly evolving world of crypto.
Every Tuesday, Unchained interviews industry leaders and thinkers regarding trending crypto topics. On Fridays, the host recaps the entire week’s key happenings and conducts a Q&A session covering the juiciest news of the week. Overall, Unchained offers a comprehensive look at the world of crypto and blockchain through her interviews, making it a valuable resource for those interested in staying up-to-date on the latest developments in the field. Unchained is also home to The Chopping Block, where four early-stage crypto investors discuss the latest event in the space.
4. Bankless: Your Ultimate Guide to the Crypto Space
Bankless is a podcast hosted by Ryan Sean Adams, the founder of Mythos Capital, an investment company in the crypto space. The podcast provides listeners with the latest news and insights on blockchain technology, cryptocurrency investment tips, and the history of money. Ryan and his guests also discuss various topics related to the DeFi ecosystem, including NFTs, smart contracts, and the future of money.
Notable podcast guests include Ethereum co-founder Vitalik Buterin, the CEO of ChainGuardian, Jameson Lopp, and United States senator, Sen. Toomey. The podcast strongly focuses on educating the masses, while sharing strategies for investing in crypto and NFTs. Overall, Bankless is a valuable resource for anyone investing in blockchain and cryptocurrency and who wants to learn more about the space.
5. Rug Radio: A Crypto Podcast for the People, by the People
Rug Radio claims to be the first genuinely decentralized web3 media platform. Unlike other podcasts, Rugradio members and hosts own the podcast. The podcast believes it’s building a platform where the incentives are tailored to truth, ownership, and long-term vision for all the participants. Ownership implies the audience has a hand in what is aired, how it’s aired, and the incentives generated through the podcast.
Every Monday at 5 pm EST, Lori Grace and MJ hosts the Elevate show. The show promotes women, nonbinary, and other minority groups via exclusive interviews, sharing important news, and featuring artists. Every Tuesday at 2 pm EST, Kristina and Jesse Soleil host the Web3 Queeroes show, featuring the best queer artists, content creators, and industry think tanks. To gain access, you need a Rug Radio Membership Pass, which also opens up Rug Radio’s Genesis NFT collection, which will let you earn the RUG utility token.
6. ngmi: Web3 and NFT
ngmi is a web3 and NFT comedy podcast hosted by Kmoney and Champ. The podcast covers topics mostly related to NFTs, including the insights from artists and creators behind NFT collectibles like DeGods and Pudgy Penguins, and mainstream celebrities like Seth Green and M Shadows from Avenged Sevenfold.
NGMI features interviews with industry experts and thought leaders and discussions on the potential implications of NFTs and crypto for various industries. Notable coverage includes discussions on the booming NFT market, the rise of NFTs in the art world, and the potential use cases for NFTs in gaming and the metaverse.
7. The Scoop: The Block’s Flagship Podcast
The Scoop is a weekly cryptocurrency podcast hosted by Frank Chaparro. The podcast covers the latest news and developments in the crypto industry, focusing on fintech, crypto, regulation, and blockchain technology. Chaparro interviews crypto project leaders and experts to provide in-depth analysis and insights on current events and trends, while sharing additional data from The Block Research.
Notable coverage on the podcast includes discussions on the growth of cryptocurrencies, the rise of fintech, and the impact of digital assets on traditional financial institutions. Overall, the Scoop podcast offers listeners insights from crypto personalities, while also sharing highlights and features from The Block Research, so you can catch up with the latest reports and insights while staying informed about the latest developments and trends.
8. GreenPill: Crypto-Economic Systems That Create Positive Externalities
Kevin Owocki, the founder of Gitcoin, hosts GreenPill.co – where developers and investors join hands to build the open web. The podcast is based on crypto-economic models that positively change users and the world, with a focus on regenerative finance (ReFi). It explores the application of digital currencies, game theory, and economic models. Kevin searches for new ways to fund, design, create, and market regenerative crypto use cases. Basically, the show is trying to initiate a meme of regenerative web3 economics in the world.
Tune into the GreenPill podcast to learn more about blockchain creators solving coordination problems and building a more regenerative system using Ethereum.
9. A16z: All About Technology and Change
The A16z Podcast is worth listening to as it features discussions centered on tech, innovation, and change and how these influence our lives. The podcast covers a broad range of topics – from technology trends to culture to business management for businesses of all sizes. Andreessen Horowitz, a Silicon Valley-based venture capital firm, hosts the A16z episodes. The firm releases several weekly episodes featuring industry experts, business leaders, and other world thinkers and voices, like Neal Stephenson, who coined the term “metaverse,” and is the guest for a conversation on the topic.
From technology trends to business management and innovation, the podcast’s guests – directed by Andreessen – shed light on how we arrived here and where we are based on their experiences and knowledge.
10. UpOnly: Currently on Hiatus?
Originally, UpOnly is a podcast hosted by Cobie and Ledger every Thursday at 8 pm UTC for the main show. It focuses on news in the cryptocurrency and blockchain space. The hosts provide insights and analysis on the latest developments in the industry and sometimes sprinkle in some goodies to the listeners.
UpOnly also features interviews with leading figures in the crypto and blockchain space, providing listeners with a wide range of perspectives and insights. The podcast has covered notable topics such as the rise of DeFi, NFTs, and the growing mainstream adoption of cryptocurrencies. Overall, UpOnly is a valuable resource for anyone interested in staying informed on the rapidly evolving world of crypto and blockchain.
Do note that as of time of writing, UpOnly seems to be on hiatus as its hosts have left.
Bonus: CoinGecko Podcasts
Tune in to the CoinGecko podcast if you want to learn the finer details about crypto, blockchain, DeFi, NFTs, fintech, and web3 applications. CoinGecko hosts the brightest minds, thinkers, and builders in the cryptocurrency industry to bring web3 knowledge to listeners.
The podcast’s goal is to give listeners a deeper understanding of the crypto market, and it covers various topics including the latest news and trends, featuring some of the most exciting projects in the space. Do note that the CoinGecko podcast is currently on hiatus and there won’t be any new episodes released at the moment.
Conclusion
The crypto and NFT space is filled with diverse podcasts that offer valuable insights and perspectives on the latest developments and trends. Keeping up with crypto through the best crypto and NFT podcasts of 2023 provides you with informative and up-to-date coverage of the crypto and NFT space, while featuring unique perspectives and analyses.
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Bitcoin vs. Ethereum: Digital Gold vs. Decentralized Computer
Key Takeaways:
- The idea of blockchain technology as the bedrock of a decentralized payment solution was initiated via Bitcoin by Satoshi Nakamoto.
- Ethereum was introduced later on (by Vitalik Buterin and the Ethereum founding team) as a complete system built on the blockchain. It powers proper applications, the decentralized internet, and payment solutions.
- Before Ethereum switched to the Proof-of-Stake consensus algorithm, it shared the reign with Bitcoin as the two biggest Proof-of-Work networks.
- Bitcoin and Ethereum were built for different purposes but collectively influence the whole crypto space. Their influence is evidenced in the market size, dominance ratios, and the number of spin-off projects.
In a recent interview with BusinessInsider, Vitalik Buterin cited Bitcoin’s “limited functionality” as the primary reason he (and his team) went out of their way to build a blockchain with a native programming language and support for various applications.
Whether he envisioned one of the most popular blockchains or just a decentralized game hosting network (where players cannot be ‘hobbled’ out of their favorite Warcraft game characters), Ethereum blockchain has gone ahead to achieve both of these.
The Bitcoin blockchain on the other hand has grown from a payment solution to a political and economic revolution, and it’s also the host network to the biggest cryptocurrency in market size and user community.
Both chains serve different purposes and excel in their separate sectors. Here, we look at the remarkable similarities and differences between them.
Bitcoin vs Ethereum: An Overview
A Bitcoin and Ethereum comparison is basically comparing two blockchains – built for different purposes, but on the same backbone.
The Bitcoin blockchain was designed to handle peer-to-peer transactions and keep records of ‘spend’ and ‘receive’ activities involving bitcoin. The records are kept on a public ledger, and as such are accessible to anyone on the network and outside of it. Bitcoin has been used to process payments at different levels and each time, it has shown great potential for even higher applications.
Merchants and service providers all over the world are integrating Bitcoin’s infrastructure into their payment systems as a more flexible approach to routine transactions. The bitcoin currency has also emerged as a store of value and an issue of political debate. These debates are majorly towards regulation and constructive adoption. Bitcoin already ticks all boxes as a payment solution, and it’s still a work in progress!
On the other hand, the Ethereum blockchain supports peer-to-peer transactions but this feature is integrated into a complete system. Ethereum’s system works in synergy with a series of automatable systems that are structured to create a platform on which decentralized applications can be built.
Gavin Woods’ smart contract technology enables the Ethereum blockchain to work as an automated vending machine. It makes it capable of executing transactions according to instructions decoded from code bits that can be understood by Ethereum’s state machine. This machine is known as the Ethereum Virtual Machine.
Ethereum blockchain also supports the creation of additional tokens that run parallel to the native token. They are designed according to different ERC standards to gain certain abilities and serve different purposes. For example, ERC-20 is the standard for smart contract tokens on Ethereum, while ERC-721 is the standard for NFTs.
The Ethereum blockchain has been functional for less than a decade but is already home to thousands of smart contract tokens and decentralized applications that leverage the smart contract technology and the EVM to design real-world utilities.
While it’s not exactly an apples-to-apples comparison, but let’s take a look how these two crypto giants compare against each other.
Market Performance
Bitcoin occupies the top spot in the cryptocurrency rankings according to market capitalization. Since cryptocurrencies began to proliferate, it has held on to this position amidst the competition. But this is not just due to the “first to market” privilege.
Bitcoin has maintained its status as a pioneering and pace-setting figure for the rest of the space. It also leads the space in terms of adoption and mainstream influence. These translate into higher investor interest and subsequently, higher market size. Bitcoin’s value (per coin) hits peaks regularly, going as high as $65,000 during the bull market. Its market capitalization had crossed the one trillion dollar level at that point.
Before Ethereum emerged, the cryptocurrency sector had already started taking shape. Bitcoin occupied the top position and was trailed by a number of altcoins.
After Ethereum’s fundraiser, the smart blockchain steered its way into the top ranks. Moving up against older projects, it claimed the second position in January 2018 and has since held tight to this position, fighting off periodic dethronement. It has stayed in this position for over 3 consecutive years.
Like bitcoin and other cryptocurrencies, Ether’s price has also attained regular peaks, peaking at $4,800 in November 2021. Its market capitalization peaked at $600 billion by this time as well.
Bitcoin and Ethereum have a combined dominance of over 50%, with BTC claiming over 35% of the total cryptocurrency market capitalization and ETH holding on to about 18% of the space.
Consensus Mechanism and Mining
Before the third quarter of 2022, Bitcoin and Ethereum Blockchain worked on a similar consensus mechanism and mining system. Both blockchains ran the Proof-of-Work consensus and required participants on the network to run nodes on their devices, validate blocks added to the chain and receive rewards for this service. A major difference between the two at this time was that Bitcoin uses the SHA-256 mining algorithm while Ethereum used the Ethash algorithm.
On migration to Proof-of-Stake in September 2022, Ethereum’s consensus mechanism and mining system changed, marking a huge difference between the two blockchains in this aspect.
In contrast to the Bitcoin blockchain, participants of the Ethereum network secure the blockchain by staking their assets on the network and running a validator node. Validators stand more chance of validating a block and receiving rewards if they stake more assets on the network. Validators on the Ethereum blockchain will need to stake at least 32 ETH to be able to run a node, or they can also join staking pools if they wish to commit a smaller amount. For the Bitcoin blockchain, miners with higher computing power are more likely to earn validation rights for a block and receive mining rewards. Ethereum stakers also have the option to engage in liquid staking, where they can unlock their staked tokens’ liquidity and engage in activites like selling, lending, and other DeFi activities.
One advantage Ethereum has gained over Bitcoin since its migration to PoS is compliance with stipulated ecologically healthy energy consumption. The Proof-of-Stake consensus algorithm requires less computing power and electrical energy and is therefore a greener way to run a blockchain network. This was one of the main reasons why Ethereum developers made this switch. However, arguments against this shift see this as making Ethereum less decentralized.
Tokenomics
Bitcoin’s economic setup has been pitched to custodial institutions as a better way to run national and organizational finance. This is based on bitcoin’s hard-stamped supply and conditional deflationary supply. Bitcoin’s supply is pegged at 21 million, and a good percentage of the circulating supply has already been mined. The remaining supply will be distributed over time to miners on the network.
No bitcoin was minted before the genesis block was mined. Bitcoin’s creator also designed a reward-halving algorithm to reduce miners’ rewards every four years, and drive more scarcity and stretched supply.
In contrast, Ethereum’s supply isn’t limited. New coins will be issued as long as the chain runs. About 72 million Ethereum coins were already issued on the blockchain before the genesis block was mined.
However, as part of the switch to Proof-of-Stake, Ethereum blockchain executed a triple halving exercise that reduced rewards by over 80%, which caused the currency to be deflationary (for now).
Ethereum’s EIP-1559 also introduces a burning mechanism designed to reduce the coins in circulation every time a transaction is executed on the chain. According to this, a fraction of the fee paid for a transaction is removed from circulation through token burning.
Bitcoin is primarily used as electronic cash, and also for paying fees for transactions on the Bitcoin blockchain. Ethereum is also used for these, but an even greater application is its use as a utility token on the Ethereum blockchain and applications built on the blockchain, as every user on the Ethereum network, including Layer 2s, needs ETH to pay gas fees.
Network Efficiency
Bitcoin and Ethereum blockchains process transactions at different speeds, and charge varying fees for each transaction. The Bitcoin blockchain can handle just 7 transactions per second. In comparison, the Ethereum blockchain can handle around 12,7 transactions per second. The switch to Proof-of-Stake and other deliverables of Ethereum 2.0 like Sharding is expected to increase this value by a wide margin.
Fees for transactions on these blockchains are charged in the native tokens. When converted to USD, the Bitcoin blockchain charges an average of $1.70 for a transaction while the Ethereum blockchain’s transaction fees vary according to network usage, reaching previous highs of over $50, but currently at around $0.80 based on Etherscan. To reduce the cost and increase the throughput of transactions on Ethereum, users may opt for Layer 2s that utilize technologies such as sidechains and optimistic and ZK rollups to increase scalability and usability.
Community Size
Bitcoin and Ethereum and the two biggest cryptocurrencies in terms of market value and community. Bitcoin is arguably the most popular cryptocurrency, with Ethereum coming right after it on the list. For an idea of Bitcoin’s popularity, over 105 million people worldwide hold bitcoin. Being the most paired cryptocurrency on exchanges, a majority of cryptocurrency enthusiasts have held bitcoin at least once. This is almost the same for Ethereum.
Market Perception
Bitcoin’s influence on the cryptocurrency sector is so strong that the price development of any other cryptocurrency is mostly dependent on bitcoin’s state at that time. A drop in bitcoin’s price is likely to cause a drop in the value of other cryptocurrencies, including Ethereum. This is reflected in the Bitcoin dominance chart, which is one of the ways in which traders and investors measure the performance of the whole crypto market.
Bitcoin is perceived as the ‘king’ and cryptocurrency traders take its movements as a serious indicator. This is because Bitcoin is seen as a reserve currency and a standard for every other cryptocurrency. Traders are engaged in constant swapping between bitcoin and other assets and are focused on building up their reserves, so movements of bitcoin can reflect the potential movement of altcoins and their prices.
Ecosystem
Bitcoin and Ethereum have created a huge ecosystem of autonomous parties utilizing their technology to build even more exciting utilities. Bitcoin, as electronic cash, is becoming a household name amongst merchants who hope to use a more flexible online payment system, with some mainstream platforms accepting bitcoin payment directly, or payment through a crypto credit/debit card.
On the other hand, Ethereum’s ecosystem is thriving. Not only is it creating utilities that cut across various aspects of technology, these utilities are appealing to most users. Ethereum’s ecosystem consists of payment solutions and decentralized finance (DeFi) projects, artificial intelligence, gaming (GameFi), data storage networks, asset management projects, and more.
Bitcoin vs. Ethereum Summary
Is Bitcoin or Ethereum Better in the Long-Term?
It really depends on your preference. While bitcoin is an established store of value (hence the occassional reference to bitcoin as “digital gold”) and enjoys institutional adoption, Ethereum has popularized developments in the crypto space such as NFTs, along with smart contracts on the EVM that drive decentralized applications. That said, Ethereum definitely has more competitors in its corner, fending off up and coming Layer 1s like Solana that offer lower transaction fees and similar utility.
Final Thoughts
Two pioneers of different ideas and propagators of one revolutionary concept. The greatest similarity between Bitcoin and Ethereum is that they have both shown what can be achieved using blockchain technology. This is a personal opinion; but just like Bitcoin, Ethereum is not an altcoin. After all, like Bitcoin, Ethereum plays a trailblazing role for the rest of the crypto space and the world outside it, in terms of blockchain utilization.
Prior to Ethereum’s emergence, a long list of “decentralized Electronic Cash” projects dominated the crypto space, each of them an enhanced copy of the Bitcoin blockchain. Within this time, the use of distributed ledger technology was limited to “electronic cash.” Ethereum shed light on what else could be achieved with this design and since this time, the space has gone beyond P2P payments.
While we’ve shared an overview of how these two giants differ, this comparison isn’t meant to pit each community against the other, but to properly discuss the offerings of both entities. The Bitcoin and Ethereum communities are the biggest cryptocurrency communities, intersecting at several points, and are pushing blockchain adoption through new developments, and the rest of the crypto space benefits from their effort and technological breakthroughs.
As always, do apply caution while investing in digital assets as they are subject to market volatility. This article is for information purposes and should not be taken as financial advice.
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Real World Assets in Crypto: Bringing Real-World Loans On-Chain
Key Takeaways
- Decentralized finance (DeFi) yields have dried up, inching closer to traditional finance (TradFi) yields.
- Increased tokenization of real world assets, including real estate and loans, is a new source of yield in DeFi, providing opportunities for higher yield and portfolio diversification.
- One concern around real world assets is the default risks faced by real world assets protocols due to undercollateralized loans.
The DeFi industry has boomed over the past few years, reaching the peak of $181.22 billion on 02 December 2021.
Nonetheless, given the black swan events that have occurred over the past year, including the fall of Luna and FTX, we have seen the TVL drop drastically. The poor tokenomics associated with most tokens have led to inflationary pressure, causing token value to drop by more than 90%. Coupled with these issues, we can see that the DeFi yields have also decreased significantly. The days of easy DeFi yield have passed, and the industry is at a point where DeFi yields are almost on par with that of TradFi yields. Given the lower risk that the TradFi market possesses, DeFi participants have started to exit from DeFi, pivoting their capital into the TradFi market for better risk to reward.
This has sparked discussions in the DeFi industry, with market participants sourcing for higher, and more sustainable yields, as well as exploring new trends and opportunities like liquid staking. In 2023, we’re seeing real world assets stepping up to attract the market’s attention, offering a different method to earn yield, as the name suggests, by tapping on real world assets such as loans. In this article, other than understanding about real world assets, we will look at some of the most prominent real world assets protocols, including Maple Finance, TrueFi, Centrifuge and Goldfinch.
What are Real World Assets?
These are tangible assets that exist in the physical world. Examples of these are real estate, commodities and art. Real world assets are a significant composition of the global financial value. The value of global real estate was $326.5 trillion in 2020 while the gold market capitalization is $12.39 trillion.
Evidently, real world assets are huge in the traditional finance industry. However, these assets are hardly tapped on in the DeFi world. This brings about the possibility of inclusion of real world assets in the DeFi industry, increasing the liquidity available, and offering a novel asset class for DeFi participants to leverage on for investment yield. In addition, it should be noted that with real world assets, the investment yield could be less affected by crypto’s volatility.
Real World Assets in DeFi: Credit Protocols
Over the past few years, and in 2022 particularly, the market has seen the rise of protocols tapping on credit markets in traditional finance. This comes as no surprise given that credit is the key to businesses growing.
Businesses typically use capital to invest in research and development, grow their team and carry out marketing efforts. They can access capital through either debt financing or equity financing. Debt financing is usually preferred by teams, given that it allows them to retain control over their business while gaining access to the capital required.
The emergence of on-chain credit protocols allows for such businesses to tap into the DeFi ecosystem, a $57 billion industry as of writing, for capital. This lowers the barrier to entry for businesses, especially that of emerging markets, to receive loans. This is supported by the chart shown below, indicating the number of loans given by on-chain credit protocols to each geographical region. As of the current point, businesses in Nigeria have achieved the most number of loans, 21 in total, followed by Mexico with 20 loans and Kenya with 19 loans.
Having understood what real world assets are and how on-chain credit protocols generally work, we can now dive into some of the biggest players in this particular sector.
Maple Finance (MPL)
Maple Finance is an institutional capital market infrastructure, creating the platform for institutional borrowers to tap on the DeFi ecosystem for loans.
There are three parties involved:
- Institutional borrowers: These are the participants who require loans
- Lenders: DeFi participants who deposit capital into the pools on Maple Finance
- Pool Delegates: Credit professionals that underwrite and manage the pools on Maple Finance.
This is how lending is carried out on Maple Finance:
- Pool delegates source for institutional borrowers. They will conduct due diligence, underwrite and negotiate terms with the institutional borrowers. This includes Know Your Customer (KYC) and Anti-Money Laundering (AML) processes.
- Once it has been established that these institutional borrowers are suitable for borrowing, the pool delegates will set up the pools on Maple Finance, which will be managed by them thereafter.
- Lenders will go onto Maple Finance and identify the pools that they wish to deposit into. This will be based on their risk appetite and whether they think that the terms set out in the pools are favourable for them.
- Once lenders have deposited capital into the pool, the institutional borrowers can now access the capital. Given that these borrowers have been whitelisted by the pool delegates, undercollateralized borrowing is made possible.
Goldfinch (GFI)
The protocol is focused on lending to real world businesses, and particularly, businesses within emerging markets. Goldfinch caters to a diverse range of businesses and offers attractive yields that go up to 30%, as apparent from their pools.
There are three parties involved:
- Borrowers: These participants propose Borrower Pools to seek capital financing through Goldfinch
- Investors: Participants that provide capital to borrowers. There are two types of investors: Backers and Liquidity Providers
- Auditors: Participants who conduct due diligence to ensure that borrowers on boarded onto Goldfinch are not engaged in fraudulent activities.
This is how lending is carried out on Goldfinch:
- Borrowers first undergo an audit by auditors to determine that they are eligible to loan.
- Once approved, borrowers can create borrow pools and determine the credit terms, which includes metrics such as interest rate, limit, payment frequency, term and late fee.
- Investors can now come in to supply capital.
- Backers supply capital directly to the borrower pools and are the first loss capital. Hence, they receive a higher return.
- Liquidity providers supply capital to Goldfinch, which is then allocated across all borrower pools.
Centrifuge (CFG)
The protocols mentioned above have all been a good example of incorporation of real world assets into the DeFi ecosystem. However, they are all focused on the credit aspect. To bring more colours into the on-chain credit ecosystem, Centrifuge comes around to allow for more forms of real world assets to be brought onto the ecosystem, and has a slightly different mechanism by incorporating Non-Fungible Tokens (NFTs).
There are two parties involved:
- Asset Originators: These are the borrowers that tokenize their real world assets into NFTs
- Investors: These are the lenders.
Centrifuge’s decentralized application (dApp) is known as Tinlake, serving as a marketplace and investment dApp.
This is how lending is carried out on Tinlake:
- An asset originator bridges a real world asset using Tinlake. This asset is converted into an NFT, which includes relevant legal documentation.
- Asset originators can now create asset pools using the tokenized real world asset NFT as underlying collateral.
- Upon pool creation, two tokens are created: DROP tokens and TIN tokens.
- Investors can decide which pool to provide capital into based on their individual risk profile, buying either DROP or TIN tokens.
- DROP token holders have a guaranteed return, determined by a fee function that has a fixed interest per pool, compounded every second.
- TIN token holders, on the other hand, do not have a guaranteed return. They receive a variable yield that is based on the investment returns from the pool, which could be higher than the returns from holding DROP tokens.
- TIN token holders borne a higher risk as they take the first loss in the event a borrower defaults.
Advantages of Credit Market Protocols
There are a variety of advantages brought about by credit market protocols. There are two angles to view this.
1. DeFi Participants
As of this current point, the yields offered by credit protocols are higher than that of most DeFi protocols. The APY provided by each of the protocols are as follows:
- Maple Finance: 8.31%
- TrueFi: 2.08%
- Centrifuge: 9.31%
- Goldfinch: 8.31%
In addition, DeFi participants will be able to diversify their portfolio, given that institutional borrowers that run real world businesses are less correlated to that of the crypto market.
2. Emerging Markets
It is typically difficult for businesses in emerging markets to receive undercollateralized loans. This is because of the higher requirements that have been set in stone in the traditional markets. Such regulations make it extremely difficult for small businesses to scale, given that they are unable to access capital and even if they were able to, it would come at a huge cost to them, undermining their runway to scale.
The DeFi ecosystem presents a new source of loans, and increases their capital efficiency given that undercollateralized lending is made possible. This is also a benefit that results from the removal of middlemen and utilization of smart contracts for certain operations.
In addition, by borrowing on-chain, these businesses are building their on-chain credit profile. By paying their loans on time, they will be better positioned to receive more loans in the future, and these loans can even be of a higher quantum.
Disadvantages of Credit Market Protocols
The greatest risk that exists would definitely be the default risk posed by the borrowers. Given that these are undercollateralized loans, the lender will not be able to receive their full capital in the event of default. This has been an ongoing problem, apparent from some protocols:
- Maple Finance: $69.3 million
- TrueFi: $4.4 million
- Centrifuge: $2.6 million
It should also be noted that despite the protocols reducing the amount of crypto volatility faced by lenders because of the usage of stablecoins, it is still subjected to the bigger fallouts in the industry. This is very evident from Maple Finance’s case where close to half of its default came after the FTX fallout.
Other than the impact on lenders, protocols could also suffer from bad debt, undermining the protocol’s longevity.
The other inherent flaw with the current credit protocols would be that of human bias. The KYC and AML process, along with the whitelisting of borrowers, are being determined by humans.
Real World Assets Protocols’ Token Performance
So how have the credit protocols performed? All the native tokens have underperformed Ethereum by more than 20%. The following table shows the drop in price since their all-time highs:
Despite the adoption of credit protocols, with 1,481 loans issued, total loan value of $4,421,679,320 and active loan value of $422,314,511, the protocols have yet to perform well on the token front as of time of writing.
Conclusion
Real world assets is an interesting vertical with lots of potential, given how huge the market is in traditional finance. We have seen the space being occupied by multiple credit protocols, each with a twist on how they run the protocols.
However, it should be noted that despite the advantages that it brings about such as diversification of portfolio and higher yields, the risk of default is an area that has yet to be addressed successfully. The only exception would be Goldfinch, which has not faced a single default since starting.
In addition to the credit market, there are also other real world aspects that have been gaining market interest. An example of which would be the tokenization of real world assets such as real estate or art. With the digitalization of such assets on-chain, fractionalization of the asset is made possible, allowing people to have partial ownership.
This will be an exciting space to watch, given the rapid developments done by the protocols and we can look forward to more adoption from the market.
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Open Edition vs. Limited Edition NFTs
Key Takeaways
- Open edition NFTs allow for an unlimited number of NFTs to be minted by collectors or members of the NFT project’s community. An open edition NFT aims to reach as many people as possible and is usually set at a low minting price to lower the price barrier.
- Limited edition NFT projects issue a specific number of NFT art or media, where only the predetermined amount can be minted, thus driving the value up through rarity.
- Open and limited edition NFTs describe the distribution strategy for an NFT. An NFT project can adopt any of these strategies for the distribution of its associated art or media.
NFTs are gaining steam again. A number of NFT projects have seen their floor prices rise, as the market recovers from the crypto winter. Besides famous names like Bored Ape Yacht Club (BAYC), CryptoPunks, and Pudgy Penguins, there’s also been a spike of interest in open edition NFTs.
After all, the accessibility of these collections, with low prices and no caps on the amount of art pieces that can be purchased within the sale window, is attractive to collectors, while offering newcomers a low entry point to the NFT market. Combined with game theory and FOMO over potential future opportunities, open edition NFTs are taking off.
What Is An Open Edition NFT?
For NFT projects that have gained popularity, or NFT projects run by famous artists or mainstream creators, a new drop is usually a significant event in the NFT space. One example is the upcoming NFT drop by Gucci. Due to the reputation of the issuing team, the NFT has already gained a huge demand before it even hit the marketplace, even in the face of a complex list of requirements to receive a mint pass (limited to 5,000).
On the other hand, there are open edition NFTs, which adopt an open approach to the NFT’s availability. A few examples include the Checks VV NFTs by Jack Butcher, “MON3Y PR1NT3R” by Alex Ness, and Snoop Dogg’s “Behind the Music.”
Open edition NFTs are open in terms of supply and distribution. They have no set limits on the number of art piece (or digital signatures for multimedia) that can be minted by the collectors. Every collector that participates in the minting event can mint as many NFTs as they wish (or can afford).
In the majority of open edition NFTs, the only set limit is the minting period. The duration of the NFT minting event is set to a time interval (say 24hrs from the start of minting), during which any number of NFTs can be minted. When this set time elapses, the minting event ends and the number of NFTs minted by the collectors becomes the total supply for the collection.
The rarity of the collection and its art is decided by the number of collectors who participated in the event and the amount of art they minted.
Most open edition NFT projects also remove a significant participation barrier by not whitelisting participants for the minting event. The usual procedure is to share links to the minting portal with the general NFT community and even beyond, enabling any interested collector to mint during the event.
Open Edition NFTs vs. Free Mints
Open edition NFTs might be mistaken for free mints, but both terms are very different. Free mints are NFTs issued for free, where collectors participating in the minting event can obtain the NFT at no cost and the only fee paid is the gas fee for the minting transaction. To gain access to free mints, users usually have to meet certain requirements.
While open edition NFTs can also be free mints, they are usually priced at affordable rates without complex requirements in order to meet the goal of reaching as many collectors as possible.
Open Edition NFTs and the ERC-1155 Multi-Token Standard
Open edition NFTs follow the ERC-1155 multi-token standard instead of the usual ERC-721 standard used by NFTs.
The ERC-1155 smart contract standard was introduced and developed by the Enjin team as part of the EIP-1155 proposal. ERC-1155 defines a unique multi-functional smart contract standard that allows the creation of ERC-20 and ERC-721 tokens in one contract. With its “single contract for everything” design, an ERC-155 smart contract supports the creation of fungible, non-fungible, and semi-fungible tokens and multiple non-fungible tokens without writing a new contract each time.
Basically, when used in open edition NFT minting, the art pieces minted by the collectors are mapped to one contract, instead of developing a new contract for every mint. Prior to the introduction of the ERC-1155 smart contract standard, developers would need to write a new contract if they wish to create a new type of smart contract token or another variant of the smart contract standard token they already created. The ERC-1155 smart contract standard also supports a few extra features like batch transfer of tokens and an easy-to-develop atomic swap.
Beyond open edition NFTs, the ERC-1155 token standard was originally designed for GameFi developers who wish to issue NFT and ERC-20 cryptocurrencies in their games. Using this standard, the developer saves time on writing new contracts and the cost of minting new tokens for their projects.
What is a Limited Edition NFT?
Limited edition NFTs thrive on scarcity, where only a limited number of pieces are available. Once the predetermined number of NFTs are minted, any collector who was unable to mint an NFT will have to resort to the resale marketplace.
Most famous NFT projects are Limited Edition, such as the BAYC NFT collection, which is limited to 10,000 pieces of art featuring bored apes. These limited edition projects may also offer unique artwork, where each NFT is algorithmically created based on a variety of attributes, ranging from expressions, clothing, accessories, and more.
Even though open edition NFTs are growing in popularity, limited edition NFTs are more pronounced in the NFT space. After all, collectors have a preference for rare art, and limited NFTs with low supply are attractive to collectors who enjoy exclusivity.
A good percentage of limited edition NFTs are of the ERC-721 smart contract standard.
What are ERC-721 Smart Contracts?
ERC-721 describes a smart contract standard for creating non-fungible tokens, where no more than one token can be issued under its contract. The ERC-721 smart contract was proposed by Willian Entriken and Dieter Shirley on the EIP-721. Each ERC-721 token is identified by a unique ID and can be issued as a representation or real asset or as a digital signature for arts, multimedia, or intellectual properties.
ERC-721 smart contract standard is suited for limited edition NFTs, where the creator can issue the token as a 1/1 drop. Minting art in the collection will require a unique identifier in the contract. ERC-721 is one of the earliest NFT smart contract standards and is still dominant in the space.
The absence of a multiple smart contract support system is the major difference between ERC-1155 and ERC-721 smart contract standards. While an ERC-721 smart contract token can be created alongside an ERC-1155 in a smart contract, the reverse is currently not possible.
Rise of Open Edition NFTs: Are They Worth It?
Open edition NFTs have revived the quiet NFT market. In January 2023, Jack Butcher’s Checks VV NFT had over 16,000 pieces of art minted during the open minting event, where each piece was minted for $8. Checks VV NFT’s story is one of the most popular in the NFT space in the past few months. Since its launch, prices for Checks VV have risen to over $2,000, and its success is driving profit-seeking collectors to open edition NFTs as they search for the next big thing. While it’s been the cause of much of the current buzz around open edition NFTs, they have been around as early as 2021.
Other open edition NFTs have benefited from this wave. Vincent Van Dough’s Pepe meme-themed version of the Checks NFT has sold over 230,000 pieces of art as open edition NFTs. Other notable open edition NFTs include Snoop Dogg’s Behind the Music NFT drop on Sound.xyz, raising over 40 ETH in mints. Alex Ness’ “MON3Y PR1NT3R” open edition NFT also sold over 20,000 copies at about $100 each in late January 2023.
Ultimately, open edition NFTs offer more collectors the chance to own artworks at affordable prices, although that may come at the cost of value appreciation. However, at the moment, drops, especially those from reputable artists, are still profitable for buyers, so the open edition NFT wave is likely to continue for the moment. In the next section, we’ll look more closely at the advantages and disadvantages of open edition NFTs, although these may change as open edition NFTs continue to evolve.
Pros of Open Edition NFTs
Flexible Distribution Scheme
NFT creators releasing a limited edition NFT will need to determine the number of tokens to mint. This process requires considering factors such as their reputation, the time taken to produce the art or media they are releasing, and how they intend to drive traffic and hype for the minting event.
For open edition NFTs, the artist can simply drop the NFT minting event plan and let the community mint as they like during the minting period. The distribution spread is freely determined and the creator can save the time spent on preliminary release calculations without worrying about overproduction (or underproduction).
Broadening the Collector Base
In the absence of a whitelisting program and every other protocol usually followed by limited NFT creators, an open edition NFT drop is more likely to reach a diverse community of collectors and even non-NFT investors. The nature of an open edition makes it possible for anyone to discover a minting event and (potentially) proceeding to mint a few NFTs, be it whether they see it as an investment opportunity or just because they like the art and concept.
Profitability
Some challenges facing the profitability of open edition NFTs include artists setting the price low to allow many collectors to join the minting event, and also the probability of the event not attracting many investors, both of which may subsequently impact the price of the artist’s future collections.
However, this is not necessarily true. As always, it depends on the creator and the popularity of the release. An open minting event from a reputable creator, combined with low prices can influence widespread participation, will likely lead to an overall high profile minting event. Some creators also implement game theory into their open edition NFTs, such as Checks VV, where the supply of NFTs can change depending on the decision of their holders.
Supporting Charitable Causes
As open edition NFTs don’t have a limit on the number of mints, charity organizations can adopt this concept as a way to raise funds, while rewarding donors. Each volunteer mints an NFT and pays the fee which is collated and regarded as a donation. However, before donating to causes through open edition NFTs, remember to do your due diligence on the NFT creator and how they intend to transfer the donations to the beneficiaries.
Disadvantages of Open Edition NFTs
More Suited for Popular Artists
Dropping a successful open edition NFT is more likely when the creator has already gained fame and a good reputation in the NFT space and beyond. If this is not the case, the creator risks losses due to few collectors minting the NFT and being unable to dilute the low prices set for the art.
Unpredictability
The resale value of an Open Edition is hard to determine before the end of the minting event. This is because the number of NFTs in supply is unknown until the minting is over. In cases where many collectors participate and an unsustainable number of NFTs are minted, collectors may struggle to find a buyer for their art.
How to Mint an Open Edition NFT
NFT minting platforms like Manifold delineate steps for creators to program the smart contract for their NFTs without having to code. An advantage of platforms like Manifold is that the creator retains full ownership of the minted asset. This is unlike platforms like OpenSea, where the NFTs are minted into the platform’s own contract. Minting platforms allow creators to set up automated minting and also define the minting limits.
For collectors, minting an open edition NFT would require obtaining a link to the minting portal or platform. Creators usually share links to their NFT minting portal on social platforms.
Click on the link and follow the steps required for each platform to mint the NFT to your wallet. Note that you will not be able to mint the NFT once the minting period elapses.
Be careful of scams. Before clicking any links, ensure that the source is checked and scrutinized for any possible tweaks (e.g. domain extensions or visually similar characters) and only click links once their authenticity is confirmed.
Final Thoughts
The regular art collector looks out for two major attributes before purchasing an artwork; the rarity and the uniqueness of the art. This is the same for NFT art collectors. Impressive art is a good attraction, but rarity is a very important feature of NFT art, as seen in the success of limited edition NFTs.
Open edition NFTs sacrifice some of the benefits of a regulated supply for inclusion and an extended reach. While they enjoy being held by a large community of NFT collectors, the absence of a rigid regulation at the time they were being minted may affect the value if there are no additional measures put in place. The original creators could still reap handsome rewards if the demand is high enough, but resale value is in question.
However, it is important to understand that both approaches to NFT distribution are meant to serve different situations or goals. Open edition NFTs are focused on exposure as they are meant to be obtained by as many people as possible during the minting event while limited edition NFT projects channel their efforts to selling out the created assets and building value for the holders.
That being said, always perform due research before minting or buying any NFT, and also note that this content is only for educational purposes, and no part was meant to be financial advice.
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11 Types of NFTs: From Art to Memes
Key takeaways:
- NFT technology allows you to obtain incorruptible proof of ownership of almost anything.
- Institutions and individuals utilize this ability in several ways. These projects feature NFTs and support it with extra technologies so that they can serve a particular purpose. These purposes can range from simple asset ownership to proper personal identification.
- The different types of NFTs are designed to work on different fronts and still maintain the same level of security and immutability that blockchain-based systems are known with. This makes it possible for NFTs to penetrate almost any sector.
Different NFTs serve different purposes, and the unique tokens at their core (ERC-721, BEP-721, or their equivalent), enable different projects to utilize the decentralized proof of ownership system to suit their projects. Some notable types of NFTs include art NFTs and NFTs associated with decentralized games, with fashion NFTs making the headlines in mainstream media.
Let’s find out more about the different types of NFTs, how they work, and notable examples of each type.
Art NFTs
Definitely the frontrunner among other relatively popular types of NFTs. NFT art currently eclipses other types of NFTs in terms of popularity, application, and even potential. Creating a proof of ownership for unique arts is one of the earliest use cases for NFT technology. Art NFTs can range from representational diagrams to very rare digital graphics. NFT art collectibles can be AI-generated pictures and photographs minted on the blockchain and sold on NFT marketplaces.
NFT art enjoyed reasonable success as the rest of the crypto space gravitated towards everything it claimed to offer. The advent of NFT arts saw prominent mainstream artists flock into the space to stamp the ownership rights of their art on the blockchain. Artists also explored the chances of creating a value system for these arts by selling the associated digital signatory, which worked very well.
Apart from the overall huge trading volumes generated by NFT arts and collections, single art NFTs have sold for jaw-dropping figures. A popular example is Beeple’s “Everydays: The First 5000 Days” and “Human one” which sold for $69 million and $29 million respectively. CryptoPunks and Yuga Labs’ Bored Ape Yacht Club (BAYC) NFT also claim the top spot value rankings of NFT art collections, with the CryptoPunks selling for over $23 million.
Thanks to the NFT art bubble, A-class celebrities like football superstar Cristiano Ronaldo and basketballer Dennis Rodman have released self-themed art as NFTs. They join a band of mainstream figures (including former United States President – Donald Trump) who have dived into the NFT space.
Identity NFTs
Next on the list and a relatively less popular type of NFT is identity NFTs. For a while, the existence and proper mode of operation of identity NFTs has been speculative. Sequel to the release of the whitepaper for soulbound tokens (SBT) by Vitalik Buterin, the idea of developing identity systems using NFT technology has generated substantial interest.
Identity NFTs are designed to bear verifiable information about their holders. This includes the holders’ qualifications and even personal engagements. In the whitepaper released by Vitalik and his co-authors, they described the soulbound token as an NFT that depicts holders’ abilities, qualifications that they have earned, and other characteristics peculiar to them. soulbound tokens are likened to a badge, which displays these qualifications and features and presents easy means to verify them.
Unlike other types of NFTs, soulbound tokens are not transferable and therefore cannot be traded. In case a soulbound token holder loses their NFT, they can only be recovered by the issuing entity and a selected community of trustees.
A similar technology is Verus’s self-sovereign identity. Like soulbound tokens, The self-sovereign identity technology creates digital identities that function as permanent, resolvable namespaces in the Verus ecosystem. They can be used to represent individuals, organizations, or assets, and they can be configured with provable single or multi-sig certificate capabilities. Verus IDs utilize ZK snarks to provide conditional privacy for user information.
Verus claims that its self-sovereign IDs cannot be replaced or duplicated but can be transferred. A major difference between Ethereum’s soulbound tokens and Verus’ self-sovereign identity is that the latter has a simpler process of revoking or recovering the identities in case the holder loses their private keys. Verus IDs can also be traded on ID marketplaces.
Music NFTs
Music is art, a unique form of it. And like graphic art, music has also found a home in the NFT space. Musicians and other sound designers can generate signatures for their music and uphold them as proof of ownership. Sound artists have successfully devised means to trade these assets and generate income. Embracing this idea, mainstream artists and cryptocurrency projects have collaborated on programs that utilize NFT technology to improve the ownership system, economy, and the general atmosphere for individuals who ply their trade in the music industry. The mutuality in these collaborations has seen music NFTs rise in prominence as well.
Forj (formerly Bondly), through its partnership with Bandsintown, adopted NFTs as a means to reward music fans and give up-and-coming artists a chance to gain a new audience and generate income. As part of the “Big Break” program, music fans will be able to access exclusive content from new artists. However, Bondly didn’t issue proper music NFTs until it partnered with Canadian hip-hop star – Tory Lanez to sell three unreleased tracks as NFTs. As reported by the Bondly team and the musician, these tracks generated about $400,000 as proceeds from the NFT sales.
Similar NFTs have dropped since this time and more musicians have released their songs as NFTs. Legendary musician Whitney Houston reportedly sold one of her earliest unreleased songs as an NFT and generated over $900,000 from the sales. Musicians have started becoming significant forces in the NFT space. Artists like Snoop Dogg and Nas have been notably involved in NFTs, with the former releasing XYZ as an open edition NFT. Grammy-nominated artist Steve Aoki also raised over $4 million from the sale of his Dreamcatcher NFT collection, which featured unique soundscapes accompanied by animations.
Game NFTs
One of the factors that motivated Vitalik Buterin to create the Ethereum blockchain was the idea of gamers being in full custody of their in-game assets. Regardless of whether this factor was a major contributor, game NFTs is the reality of these thoughts. Game NFTs are vital for decentralized games. Decentralized game developers adopt NFTs to define the characterization and overall structure of their game(s); therefore game NFTs range from simple game characters and items to the gaming environment itself (lands).
Game NFTs can be motion NFTs or digital art which are unique to the game. The NFTs’ attributes usually translate to character features and gameplay privileges. Players can purchase these NFTs for use in game, or earn them as rewards while playing the game. Game NFTs can also be traded in-game or on NFT marketplaces like OpenSea and LooksRare.
Game NFTs are well-used by metaverse projects where they serve almost the same purpose – characterization and ownership. Popular cryptocurrency projects using gaming NFTs include Axie Infinity, Decentraland, Gala games, and My Neighbor Alice. A rising trend is free to play NFT games, where players don’t require any NFT assets to start playing.
Meme NFTs
Memes are fun conceptualizations of reactions, events, or reputations. They are meant to add humor to funny situations or as a form of euphemism or “trolling.” The most popular memes are developed from this basic concept, with some accidentally attaining this fame. The “Success Kid” and the dog “Kabosu” where the latter’s picture has been branded into Dogecoin’s logo, which is instantly recognizable as one of the most famous cryptocurrency logos. These photographs are in fact considered digital art and some of them have been minted as NFTs.
Notably, the dog image used as DogeCoin’s logo has been sold as an NFT to PleasrDAO. Dating back to thirteen years ago, the Kabosu image and the DogeCoin community have pioneered memes in the cryptocurrency space, even giving birth to an entire category of cryptocurrency – meme coins. Thanks to the heroics of DogeCoin and its community, the Doge image was auctioned as NFT for an impressive $4 million. PleasrDAO has since sold it as a fractional NFT, splitting the ownership rights of the NFT to allow as many people as possible to get a share of the art’s ownership.
Beyond Kabosu’s image, the “Success Kid” meme mentioned earlier has also been sold as an NFT for about $20,000. Other popular memes following this trend include the “Disaster Girl” meme, selling for $500,000 in an NFT auction.
NFTs like this constitute the meme NFT category. While their ownership might be controversial and complicated due to being already in wide use before being minted as NFTs, the owner(s) of meme NFTs reserve certain usage rights and hold proof of ownership.
Fashion NFTs
Fashion is a way of life, and now, it’s also starting to integrate into technology. Big players in the fashion industry are diving into the NFT space. This isn’t restricted to just mainstream firms; traditional cryptocurrency projects combine fashion and NFT technology in a goal-oriented manner. For mainstream fashion firms like Gucci, NFT technology is a medium to create proof of ownership for uniquely dressed animations and art, and auction these digital assets to NFT collectors.
Gucci’s partnership with Superplastic for the SuperGucci NFT saw both projects create fashion-centric digital arts, raising over $20 million in the initial NFT auction. The collection has traded over 6,000 ETH in volume on OpenSea and is owned by over 400 NFT collectors.
Iconic fashion brands Adidas and Nike have also sold exclusive NFTs. Adidas’ NFT sale was notably one of the biggest events in the NFT space in the last quarter of 2021, while Nike is one of the highest earning brands when it comes to NFT sales. These projects are also striving to integrate their fashion arts into the metaverse.
For traditional cryptocurrency projects, fashion NFTs are just fashion…in the virtual sense. Fashion NFTs for these projects are basically clothing for NFT characters. Fashion NFTs are commonly used in decentralized games as simple clothing or enhancement assets for avatars, where they may come with certain attributes.
Sports NFTs
NFTs are also a growing topic of interest amongst sports fans. They double as a reward system for sports fans and a new revenue source for the organization. Sports stars have also launched NFT collections for unique self-themed art and ‘rare’ images.
As a reward system, sports teams are partnering with cryptocurrency projects and developers to develop fan loyalty programs that utilize NFT. A good example is MoonPay’s partnership with the legendary Brazilian sports team – Flamengo – to issue NFTs to fans. These NFTs can be redeemed for selected rewards or allow their holders certain privileges.
Stars of different kinds of sports are also offering their fans an opportunity to own their NFT art or photographs. Owning these NFTs qualify the holders for perks like a live meeting with the star and other such privileges.
Access NFTs
To verify the ownership of the digital asset attached to an NFT, the holder only needs to present the NFT’s smart contract address. Like transactions on the blockchain, an NFT’s originality can be verified using at least one of its unique parameters. This feature is used by projects to identify holders of a certain NFT and provide them with access to certain privileges. NFTs like this are generally known as “Access NFTs.”
Access NFTs are emerging and are relatively less defined. They include everything from NFT tickets to special gaming NFTs that allow holders access to exclusive playing arenas. Access NFTs will do just as well as an alternative to the current ticketing technology. NFTs as event tickets will present an immutable and easily verifiable means to identify spectators who rightfully paid for a seat at the event.
Devin Finzer, CEO of popular NFT marketplace – Opensea – reflected on the potential of NFTs to replace traditional paper tickets.
“As far as what I wish people would make, I wish we would see more done with concert tickets. With Covid, it hasn’t caught on but tickets seem like a natural fit to me.”
Other types of NFTs may also double up as access NFTs, like the Bored Ape Yacht Club, where the token also doubles as a membership to a members-only space with features like a graffiti board.
Domain NFTs
Domain NFTs are quite popular, but they’re usually more often used as simple wallet names rather than a proper internet domain. Domain NFTs utilize NFT and smart contract technology to turn cryptocurrency wallet addresses into names that can be easily memorized. They allow cryptocurrency investors to choose a fun name to represent their wallet addresses and proceed to register these names as domains that can be translated into wallet addresses and internet resource sites. These domains bear crypto-centric extensions like .eth, .btc, .crypto, and so on.
The domain names are minted as ERC-721 standard NFTs, which can be transferred from one wallet to another and are trackable. Domain NFTs addresses can be transferred like proper NFTs and easily used on decentralized applications (DApps), Web3 applications, and traded on supported NFT marketplaces. Ethereum Name Service (ENS) and Unstoppable Domains are some popular examples of domain NFT projects.
Redeemable NFTs
Redeemable NFTs aren’t a sort of ‘new tech’ NFTs; rather they are NFTs with a real commodity exchange program. Redeemable NFTs are just about any of the aforementioned NFTs, the only difference being that holders can swap them for tangible assets. A good example of this is Uniswap’s Unisocks NFT.
Uniswap issued 500 socks tokens as a 1:1 representation of real socks. Socks tokens can be actively traded on the decentralized exchange. If redeemed for a proper sock; the socks token is burnt and the owner receives an NFT as proof that they own a real Uniswap sock. Over 180 sock tokens have been redeemed so far.
The redeemed socks can be delivered to the owner in any part of the world. Uniswap’s socks NFT are not just proof of ownership, they are proof of redemption for socks tokens as well.
A simpler instance of redeemable NFTs is Redeemable NFT, an NFT project based on the Ethereum blockchain that issues linen designs as NFTs. The NFT holder can redeem these NFTs for real beddings and have the fabrics delivered to them in their locations. Redeemable NFTs might see the light as the number of projects like this continue to grow.
NFT Collectibles
Collectible NFTs are quite popular; they are variants of a specific theme. That is, NFT collectibles are a collection of static or motion graphics of a particular entity. This entity could be animals, personas, geographical locations, or just about anything!
Creators of collectible NFTs design different appearances of these entities and accord them special attributes. The value of any variant of a collectible NFT depends on the uniqueness of its attributes and how many copies of that particular design exist (rarity). They may overlap with other categories of NFTs, such as art NFTs.
Some examples of NFT collectibles are Azuki, Bored Ape Yacht Club (BAYC), and CryptoPunks. Azuki NFTs are a collection of anime-inspired avatars, BAYC is a collection of varying graphics of an ape looking bored, and CryptoPunks are pixelated art of ruffian personas. In the case of Azuki and BAYC, ownership of these collectibles also grant access to exclusive clubs.
Final thoughts
NFT technology is evolving fast and even at this stage of its evolution, the above list is non-exhaustive. We have listed several types of NFTs, but it is important to note that these are only based on contemporary applications, and there may be new types of NFTs developed as the scope of NFTs continues to expand.
Potential NFTs applications like subscription systems, ticketing systems, and real estate might usher in a unique type of utility NFTs that are more advanced than what we have currently. As an NFT enthusiast, it is important to stay abreast of the changes in the space and related technologies.
Having said this, do note that this article is purely educational and no part was meant to be financial advice. Remember to do your own research before investing in any NFT or cryptocurrency project.
2022, 2023, Bitcoin BTC, Coin, Cryptocurrency, DeFi, Ethereum, Ethereum (ETH), Future, Games, Gaming, Marketplace, News, NFTs, Solana, Tokens, Wallets, Web 3 -
5 Best NFT Staking Projects To Explore This Weekend
With NFT staking, holders of NFTs now have a new way to profit from their assets while keeping ownership of them.
As the NFT market expands, creators and developers are looking for new applications for non-fungible tokens. One of the most recent NFT applications is to stake these tokens to generate passive income. NFT staking is the process of securing NFTs on a platform or protocol in order to gain rewards and other benefits. This enables owners of NFTs to utilize their idle assets without having to sell them. To stake an NFT, all users need is a Web3 wallet; the process is the same as for cryptocurrency.
Here are the 5 Best NFT Staking Projects To Explore This Weekend
- RobotEra
- Mobox
- Mutant Cats
- Wolf Game
- Axie Infinity
1. RobotEra
RobotEra is an upcoming metaverse cryptocurrency gaming project that uses blockchain technology to offer a number of DeFi (decentralized finance) protocols and lets users stake tokens to generate passive income. There are many other ways for players to use TARO, the in-game cryptocurrency, to profit from the game in addition to staking.
2. Mobox
Mobox is a play-to-earn gaming platform that combines yield farming and NFTs. The Binance Smart Chain serves as the foundation for the Mobox metaverse, known as MOMOverse. Players can mine, earn, or trade MOMOs, which are the Mobox NFTs used in this ecosystem. Every MOMO NFT has distinct characteristics and a hash power that is generated at random.
3. Mutant Cats
The first cryptocurrency project that buys and fractionalizes other top-tier NFTs is possibly logoMutant Cats. NFTs from some of the most well-known projects ever have been assembled in a safe vault by the project. CryptoPunks, Bored Ape Yacht Club, Tyler Hobbs, and other well-known NFTs can be found in the Mutant DAO vault.
4. Wolf Game
A metaverse project called Wolf Game has NFT staking built into its gameplay. NFTs are available as Wolves and Sheep in this universe. In order to keep their sheep NFTs safe from wolves, players will need to stake them. Players will also receive WOOL tokens as compensation for staking Sheep NFTs.
5. Axie Infinity
One of the greatest NFT games to date is frequently cited as Axie Infinity. It is designed to be a play-to-earn game in which players compete against one another using NFTs. These NFTs are known as Axies, and each one has particular advantages and disadvantages.
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Top 5 NFT Tokens To Watch Out This Weekend
Here are the 5 NFT tokens that have the potential to rise in value in the coming days and will be a huge treat for investors.
NFT, which stands for Non-Fungible Token, is a technical term for information that cannot be replicated outside of a blockchain. As a result of their inclusion in the blockchain and legitimate authenticity, NFTs have a significant impact on the collector market. Data from a recent report revealed that monthly volumes reached an eight-month high above $1 billion on January 23. The cumulative nonfungible token (NFT) trading volume trended higher on January 23.
The NFT industry is still very young, despite how often we hear the term mentioned. Many of these top NFT tokens may be worthwhile to add to your cryptocurrency watchlist. However, given the variety of non-collectible applications for NFTs.
Here are the top 5 NFT tokens to watch out for this weekend
1. ApeCoin (APE)
ApeCoin (APE) is a cryptocurrency designed to aid in the development of a decentralized web3, based on one of the most well-known and valuable NFT collections: the Bored Ape Yacht Club. APE is an Ethereum blockchain-based, fungible ERC-20 token.
ApeCoin’s price at the time of writing is $5.61, with a market capitalization of $ 2.06 B and a 24-hour trading volume down by 18.44%. Now it stands at $105 million. At the same time, the circulating supply is approximately 368,593,750 APE as per the crypto market tracker.
2. Internet Computer (ICP)
A blockchain called the Internet Computer makes it possible for programmers, businesses, and entrepreneurs to create and deploy secure, autonomous, and tamper-proof canisters. The Internet Computer is the only blockchain that stores assets as well as all other parts of an NFT on the blockchain.
ApeCoin’s price at the time of writing is $5.61, with a market capitalization of $ 2.06 B and a 24-hour trading volume down by 18.44%. Now it stands at $105 million. At the same time, the circulating supply is approximately 368,593,750 APE as per the crypto market tracker.
2. Internet Computer (ICP)
A blockchain called the Internet Computer makes it possible for programmers, businesses, and entrepreneurs to create and deploy secure, autonomous, and tamper-proof canisters. The Internet Computer is the only blockchain that stores assets as well as all other parts of an NFT on the blockchain.
Internet Computer’s price at the time of writing is $7.15, with a market capitalization of $ 2.07 B and a 24-hour trading volume down by 65.84%. Now it stands at $85 million. At the same time, the circulating supply is approximately 289,863,803 ICP as per the crypto market tracker.
3. Decentraland (MANA)
Decentraland (MANA) is a decentralized cryptocurrency that allows users to buy, develop, and trade virtual land. Users can purchase land parcels that last year’s NFT craze sold for as much as $100,000 USD. The game’s NFT marketplace allows players to sell almost anything they create.
Decentraland’s price at the time of writing is $0.7127, with a market capitalization of $ 1.32 B and a 24-hour trading volume down by 47.82%. Now it stands at $83.4 million. At the same time, the circulating supply is approximately 1,855,084,192 MANA as per the crypto market tracker.
4. Flow (FLOW)
Dapper Labs, the company behind collectibles such as NBA Top Shots and CryptoKitties, created Flow. The popularity of CryptoKitties clogged the Ethereum network, making it impossible to purchase these NFTs.
Flow’s price at the time of writing is $1.31, with a market capitalization of $ 1.35 B and a 24-hour trading volume up by 41.78%. Now it stands at $129 million. At the same time, the circulating supply is approximately 1,036,200,000 FLOW as per the crypto market tracker.
5. Axie Infinity (AXS)
Axie Infinity rose to prominence as one of the first major GameFi titles to allow players to earn a living by playing the game. The game itself is a cover for the staking and liquidity aspects of DeFi, or decentralized finance. The actual game involves players collecting, breeding, and trading NFT-like creatures known as Axies.
Axie Infinity’s price at the time of writing is $10.83, with a market capitalization of $ 1.2 B and a 24-hour trading volume down by 36%. Now it stands at $89.6 million. At the same time, the circulating supply is approximately 111,752,500 AXS as per the crypto market tracker.
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DOOM Game Now Available On Bitcoin; Here’s How You Can Play
Ordinals’ Bitcoin NFTs are evolving, quickly progressing from pixelated memes and pet rocks to a playable DOOM game clone.
DOOM Game News: Users can now play an unofficial clone of the legendary 1993 first-person shooter Doom on the bitcoin blockchain. However, it is probably not what Bitcoin creator SatoBshi Nakamoto had in mind. This is made possible by the Taproot upgrade and the contentious Ordinals project. Also, it allows users to store unique assets on it similar to NFTs.
The game, which was created by Nicholas Carlini, can be played with a keyboard and mouse. Also, it is identified as Inscription 466 on the Bitcoin blockchain. Although it is a crude imitation of the Doom game and lacks the bloody, pixelated impact of the groundbreaking original. however, it gives players a taste of what’s possible with Ordinals. Later, a revised version was engraved. It also adds a new level to the “It Runs Doom” meme, which is constantly growing and involves people trying to get the game. Over 94,000 Reddit users subscribe to a subreddit that is dedicated to the pursuit.
So does the Doom game run on Bitcoin?
The response is sort of, for now. Since content can be stored on Bitcoin’s decentralized, permissionless blockchain, it can serve as a kind of distinctive historical record. According to The Ordinal Theory Handbook, Bitcoin inscriptions, such as the Doom clone game, are preferable to NFTs. However, these are special blockchain tokens that denote ownership over associated metadata that is frequently stored off-chain in a centralized manner. Every inscription on Bitcoin through Ordinals is referred to as a “digital artifact.” However, because it is complete and decentralized in and of itself. Contrary to the majority of NFTs, whose metadata can be changed or even deleted by the creator, it cannot be changed.
Biggest Bitcoin Block to be minted
While the community mulls over the implications of adding NFTs to the oldest blockchain for the network. However, in the NFT ecosystem at large, Ordinals continue to sprinkle conversations among Bitcoiners.
Notably, the protocol just allowed for the mining of the largest Bitcoin block ever. This week, a high-definition “Taproot wizard” transaction with a 3.96MB transaction size, just shy of Bitcoin’s 4MB block size limit. Also, it was attached to a satoshi. The size of the DOOM Ordinal was only 31.2 KB.
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