In a vast and ever-changing world of cryptocurrencies, NFTs, and volatile markets, it can be tough to keep it all straight. One of the fun and exciting ventures in the marketplace is crypto collectibles.
To better understand this growing phenomenon, let’s take a look at the components that make up the space, the most popular places to buy, what these items actually are, and why so many are taking an interest!
Table of Contents
What Is a Crypto Collectible?
Let’s first define precisely what a crypto collectible is. In simple terms it is a digital asset. It is most often in the form of an NFT.
What do these three little letters mean? Again, in simple terms, NFTs simply stands for non-fungible tokens. Non-fungible tokens cannot be duplicated nor do they have an equivalent. NFTs cannot be traded straight up for one another. There is no equal.
A crypto collectible is cryptographically rare. It is digital property. Unlike cryptocurrencies, which need all tokens to be similar, each crypto collectible or NFT is distinct or exclusive in amount, design, and ownership.
Generally, an NFT is a stand-in for real-life items, such as pets or avatars.
Non-fungible tokens can represent nearly anything. From tactile real estate in the real world to a music video, these tokens are as varied as the imaginations that create them.
Most often, an NFT is a digital file. It is something that can be bought, sold, traded, and stored online. In order to sell NFTs online, digital creators formulate the files to not only represent digital assets but also to be exchanged on a worldwide marketplace.
How can all of this be made possible? Through science, of course. The world of collectibles has made a serious change from baseball cards and stamps and has jumped headfirst into the new platform of NFTs.
The collectibles of today can be anything from artwork to music, game pieces, to profile pics. If it is on the Internet, it can likely be transformed for NFT sales. So let’s take a look at the technology that makes it all possible.
If you are seeking to enter the NFT marketplace for the first time, you will quickly find that one tool you need for the collectibles space is a digital wallet. Also referred to as a crypto wallet, you will need your own wallet to operate on the crypto exchange.
A digital wallet can come in many forms, such as hardware, software, or even paper variety, but in short, they all perform the same function. A digital wallet is needed to buy NFTs, sell NFTs, or store NFTs.
Additionally, the crypto wallet will be the space where your NFTs are kept safe. Much like physical art, you will want to keep your own NFT in a safe and secure place. The technology behind the NFT markets helps to make that possible.
The security of the NFT marketplaces comes into play with the way in which they are created and stored. Referred to as blockchain technology, users rely on this peer-to-peer style of networking in order to keep both the security of the space intact, but also to support key principles of the marketplace.
Safety and Security
First and foremost, the entire concept of such collectibles relies on a secure system in which to operate. The blockchain allows for information to be secure. The blocks are created by a series of complicated, detailed computations which lock the data in place. These blocks are strung together in a chain-like series, which is made public to all users on the blockchain.
This system allows for a transparent and public ledger to be available at all times to all users. Each and every transaction on the blockchain is recorded and immutable. This makes the buying, selling, and owning of NFTs possible, not to mention safe.
Not only does blockchain technology support the security and practical transactions of the NFT process, but it also supports the underlying principles of the community at large. A big part of the NFT collectibles, as well as cryptocurrency itself, is the desire to have digital assets that do not have a central authority that is overseeing or governing the process.
The distributed aspect of the digital ledger that the blockchain creates allows for no “power that be” to be charged with the oversight of the transactions. Instead, an entire network of users can see the transparent process.
Collectors find the process more reliable and can put their trust more in a system of like-minded users, instead of having to work under the thumb of centralized power. Working with peers, and having an alternative to owning an asset without power overseeing it, is a huge check in the plus column for NFT collectors.
Unfortunately, the vast assortment of NFT marketplaces does not operate without a cost. And, besides the financial ups and downs that the often volatile and unpredictable markets can endure, these digital assets are also prone to high costs when it comes to the environment.
The environmental impact of NFTs is one of the biggest drawbacks for many looking to invest. The process of selling NFTs requires a massive amount of computing power. While it is distributed in the case of decentralized assets, it is still a cost nonetheless.
The fees for such products are typically shared in the form of gas fees, which are funds charged by creators (or those selling NFTs) in order to recoup transaction costs. Regardless of who “pays the price,” it is likely our planet taking the biggest hit.
NFT sales eat up a big chunk of energy, meaning that without the use of clean energy systems, and of course no centralized authority demanding such, the toll on Mother Earth is more than some care to support.
If you are entering the marketplace for the first time, you will find that you have quite a few choices in the way of a purchasing platform. The market is booming at present, and because of this, new types of collectibles are popping up daily. NFTs are unique items, and everyone is seeking to get their piece of the proverbial pie.
Potential buyers will find a wide variety of spaces to buy NFTs from, including a market that is constantly changing itself.
The Ethereum Blockchain
Many of today’s NFTs are bought and sold on the Ethereum blockchain. This platform is an open-sourced product, which is decentralized. This blockchain uses smart contract functionality, which allows any user to apply the contracts of others to his or her work.
Ether is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in market capitalization, so you know that this platform has a rich history, not to mention the staying power that builds confidence in its users.
Buyers, especially ones new to the marketplace, will find the friendly interface helpful, not to mention the plethora of materials available to guide them through the NFT marketplace process. Creators appreciate the industry standard of Ethereum, allowing them to mint a non-fungible token, connect to buyers, and create all in one convenient space.
Its open-source model allows the tech to be shared, making an easier process for all, with lower costs and less energy exerted. Even newcomers to the platform can start creating from the get-go without red tape and massive hurdles slowing their creativity.
Buying on the NFT Marketplace
In order to get involved in the purchase of an NFT, or to start your very own collection, you will need more than a digital wallet. Most transactions will require you to also operate your transaction in the preferred cryptocurrency of the platform.
For example, in the case of Ethereum, transactions are made via Ether (ETH) currency. This type of crypto is bought and sold on its marketplace. If your purpose is to buy on this marketplace (or for that matter interact in almost any way), you will first need to buy Ether.
NFT sales are typically not super complicated. They can be done in a variety of manners, such as a direct sale, a trade, an auction, or even being earned in a game. From a video clip to a piece of digital artwork, the wide variety of non-fungible token styles on the platform vary as much as the artists that create them.
How you are required to make your purchase will vary by the site (for example if there is an auction style of sale versus a direct buy). Services of the platform should be clearly defined and guides should be readily available. Sales can be as unique as the NFTs themselves, so the best advice is to do your due diligence and research the types of NFTs you want to become involved in collecting.
Types of Crypto Collectibles
As we’ve mentioned, there are many types of collectibles out there. Digital assets come in many forms. Artists are invited to create nearly anything they can imagine. Some of the popular types of collectibles include:
- Trading “card” collections
- Virtual “pets”
- Celebrity creations
- Video game components
From a CEO’s first tweet to a collection of images across 5,000 days, there is no limit to the style and type of collectibles the NFT marketplace can offer.
Booming Business in Crypto Collectibles
Some of the most popular forms of NFTs come in unusual packages. Some top-selling NFTs have been purchased for price tags in the millions. And some are as simple as a digital image of an ape.
Digital Art and Artists
Avatars make for big business in the world of digital art and collectibles. For example, some of the biggest names in NFTs include:
These collections involve a series of limited edition avatars, with varied background colors, accessories, facial expressions, or unusual additions. They are some of the most purchased and highest price point sales on today’s NFT marketplace.
Another industry filled with artists taking advantage of the NFT marketplace includes the world of music. Electronic dance music (EDM) artists have taken space by storm. Since digital artists make their art in computer files anyway, they’re able to authenticate the original piece of art using NFTs.
EDM artists like 3LAU, Steve Aoki, and DeadMau5 use NFTs to create original music to sell to their fans. In wake of the worldwide COVID-19 pandemic, these technologies offer a new way for artists to make additional income without being able to perform for live audiences.
Why Collect NFTs?
If nothing else, this industry is full of choice and variety. The reasons that people collect NFTs is just as unique. The marketplace, as well as the unique platform sales that support it, offers a little bit of something for everyone.
Many look at the buying and selling of these collectibles as simply business transactions. These digital assets are the new “stock market” of sorts, where the sale of each token just means dollars to some.
The creation of the NFT has made a stream of money-making abilities that did not previously exist, especially one that is so accessible to the masses. The process has also made millionaires overnight of some investors who are quick to trust a new NFT.
As with any investment, there are of course risks, and the NFT space is well known for its volatile market. No matter the platform you choose to do business on, there is an inherent gamble involved if your aim is to make money.
Other users dive into the world of NFTs for the art of it all. Art is one of the key components of the concept as a whole. The NFT gives creators the ability to have an entirely new revenue stream where once there was none.
As many are aware, the creation of the tech benefits the artist greatly. For one, the art is traceable and ownership, as well as authenticity, can be verified thanks to the blockchain. Additionally, while art can be owned by many in the way of copies, there can be only one true NFT.
Much like the “real world” art of the tangible world, digital art can be stolen. Think of the idea like that of owning a print or poster of your favorite artist. You do not own van Gogh’s “Starry Nights.” You might have a T-shirt with it stamped across its front. You may hang a poster of it in your bedroom.
What you do not own is the one, true, original piece of artwork. Similarly, you can take a screenshot of some of the most popular NFT avatars or artworks on the market. You do not, however, own the one, true digital asset.
Some owners of NFT collections simply enjoy having the right to say they own it. Whether it is the appeal of rubbing shoulders with celebrities who also own the works, or it is the online notoriety of having something so rare, scoring a hard-to-earn badge, or strictly being the “lucky one” that benefited from NFT drops, there is a certain online bragging right that comes along with owning an NFT.
Just like one may have bragged about the trading cards of the past, today’s collectors love to boast about the most unusual, highest valued, rarest, and most exciting collections out there. For some, that designation alone is worth the price of admission.
Some NFT collectors acquire digital tokens for more practical use. From using your avatar as a profile picture alongside names like Eminem, Jimmy Fallon, Steph Curry, and Post Malone, to in-game purchasing power, some NFTs have been put to use.
Just like a piece of fine art is best enjoyed by being displayed, some love having an NFT to actually USE the art. Music can sit in your crypto wallet, but it is far more likely you purchased it to listen to and enjoy.
The Future of the Crypto Collectibles Market
No one knows for sure the future of anything. The world of crypto is no different. Considering just a decade ago the term barely existed, forget creating a multi-billion-dollar industry, the future remains to be seen.
From platform creation to an entirely new marketplace, a whole new form of business has sprouted in the world of collectibles.
A large part of the investment world revolves around the unknown. There is a risk. It is a gamble. And, if we could all predict the future, the entire concept of investing would be moot.
However, with such long-lasting companies, trusted platforms, and big names in the business, not to mention the money invested and money earned thus far, it is not likely that the collection of token art will be gone anytime soon.
Skepticism Still Remains
Despite its success thus far, the concept of the token is not trusted by all. Because hacks and malware exist, not to mention copies and misconceptions, there will always be naysayers and bad doers in the world.
No matter your platform, the risk is involved. The best security services in the world cannot promise your assets 100 percent of the time. No matter the process of the sale, the concept of investing comes with skepticism and concern.
But Business Is Booming
Nevertheless, there is a wide world of platform choices, NFT collections, and sold NFTs out there. If you are ready for your own NFTs, there has never been a more robust space in which to do so. Even those new to the space, hoping to sell NFTs, can do so with a few simple steps, thanks to the advanced technology.
The NFT marketplace has a lot to offer to all involved. Networks connect buyers and sellers, and all can be done with the ease of user-friendly interfaces, step-by-step guides, and informative video clips making the business more accessible, and more booming, than ever.
Above All, Stay Informed
FLOLiO offers the resources to keep you informed, despite an ever-changing and growing space. The best way to stay on top of new collections, changes in the market, and investment opportunities is through research.
No matter your future in the world of crypto-collectibles, one thing is for sure: you need the information to make the process work.