In simple terms, NFTs are digital assets that represent real-world objects. These assets are built on blockchain technology and are mainly traded using crypto. Some of the common types of NFTs include Art, Music, Video Game Items, Collectible Items, and even Memes. These are all basically media files that are represented on the blockchain through metadata files. The metadata file is a unique and permanent record that describes what the NFT represents, its ownership, and transaction history. The metadata of an NFT also contains a link to where the media file is hosted on the internet.
The utility of NFTs is seemingly endless across various industries, and this is precisely why they are so popular. Similarly, more people are beginning to view NFTs as investment assets that can turn a profit, contributing to their growing popularity. For example, Bored Ape Yacht Club is one of the most popular NFT collections. It comprises 10,000 unique Bored Ape characters. Other popular collections include CryptoPunks and ArtBlocks. Like Bored Ape Yacht Club, CryptoPunks consists of 10,000 characters stored on the Ethereum blockchain as NFTs. The highest bidding price for a piece is pegged at about $23 million. And our own collection North Park Club, see it here on OpenSea.
With the increasing popularity of NFTs, many more trades are being conducted. It is essential to note that the bulk of NFT trades takes place on dApps. So, what exactly are dApps?