NFTs or non-fungible tokens are the latest hype using blockchain. They’re used to track ownership of a unique virtual item. Celebrities and artists are riding the NFT hype and cashing in millions of dollars as the crypto-collectibles sweep through the world.

The article will help you understand what NFTs are and learn about the most exciting NFTs startups you want to watch.

NFTs have exploded in popularity this year with the rise in the prices of cryptocurrencies like bitcoin. In 2020, NFT transactions had grown to the total value of $250 million, according to data from nonfungible.com. While in the first months of 2021 alone, overall NFT sales volumes exceeded $220 million.

The trend hasn’t gone unnoticed by investors, who have poured $90 million into NFT and digital collectibles startup companies so far in 2021. Venture capitalists are writing massive checks for startups in the booming NFT space.

What are NFTs?

The easiest is to think about them as digital certificates of authenticity. A non-fungible token is a unique, irreplaceable identifier stored in the blockchain. It’s a solution to a problem that’s long-faced digital artists; how to create scarcity for an item that can be infinitely reproduced.

Scarcity is one reason why famous paintings are incredibly costly. While a signed and numbered print is less expensive, the unlimited poster version has no real value.

Digital images are fungible, meaning that any image serves its purpose just as any other one unless they come with an NFT declaring it to be the original version.

How do NFTs work?

For example, when artists want to sell a work, they create an NFT that will stand as a claim on ownership for the piece. NFTs are registered on open blockchain ledgers, making it possible to track ownership, prior sales prices, and the number of copies in existence. And the security provided by blockchain technology. So selling fake tokens is practically impossible, which is not always the case for physical artworks.

How can NFTs be used?

People can use NFTs for other assets than digital art. You can use the technology to prove ownership of anything, even actual physical items. And anybody can freely verify this ownership. There’s a market already for digital limited sports cards, music albums.

Why do People buy NFTs?

At this point, most buyers purchase NFTs purely as collectibles or as plain speculation. However, there are few other reasons to buy NFTs; they’re unique and can represent the commercial copyright of an asset.

The current state of NFTs

In 2017, the most evident proof of concept NFT project was, at first glance, a simple concept of some breed-able collectibles called Cryptokitties. By the end of 2017, even such a simple NFT project was big enough to slow down the Ethereum blockchain and send transaction costs to the moon.

Most recently, NFTs received massive attention from mainstream media. The NBA has sold LeBron James’s video for more than $200 thousand. Later, Twitter’s Jack Dorsey selling his first tweet for $2.9 million as an NFT.

Probably the most shocking recent NFT event was the sale of a digital artist’s work as an NFT for $69 million.

Best NFT startups

Sorare

It’s like fantasy football with digital collectible cards .

Sorare is a fantasy football game combined with officially licensed digital cards. Over 100 football clubs trust and have a license with Sorare, and these clubs sell the digital collectibles of their footballers.

The big thing is the concept of the Sorare card; it’s a licensed digital collectible of a footballer for a particular season. There are different rarities of these cards, just like baseball cards. Each card is unique and represented by non-fungible tokens on the Ethereum blockchain. Users can purchase them through the Sorare platform, but they own the card, not Sorare.

As players own these cards, they can use them in different games. Currently, the main platform to use Sorare cards is the SO5 (Sorare 5) platform.

The startup recently has raised $23 million, founding led by A16z Crypto.

OpenSea

It’s like ebay for NFTs .

OpenSea aims to create a liquid marketplace for NFTs, including collectibles, digital art, gaming items, and other assets backed by a blockchain. The liquid market is essential to make the new NFT economy more usable and more popular.

The platform offers fixed price and auction listings.

The startup recently has raised $23 million, founding led by A16z Crypto.

Boson Protocol

It’s like decentralized amazon with autonomous dispute management .

The vision for Boson Protocol is to enable a world where few giant online e-commerce platforms do not capture commerce and last-mile supply chain infrastructure. It aims to allow consumers and suppliers to participate in a business to share the value they create without e-commerce platforms that only extract value.

The first generation decentralized platforms removed the intermediary, but they retain a human arbitrator to manage disputes.

What Boson Protocol does is, replaces the human arbitrator with an algorithm using advanced game theory. That logic makes it possible to automate many costs and frictions, to deliver decentralized autonomous commerce.

The startup recently has raised 5 million, founding led by Outlier Ventures.