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What is an NFT, really? How do the NFTs on Solana differ from those on any other blockchain? For that matter, what is a blockchain?
That last question may be easier to answer, but as with anything in the cryptocurrency realm, education is needed to fully understand NFTs. So many questions remain surrounding the future of NFTs, their uses, and their value.
NFTs have exploded in popularity within the last year. One doesn’t have to be an expert in blockchain technology to get involved. With that in mind, it is incredibly helpful (and recommended by most NFT experts) to know a little.
We’re breaking down the basics of how NFTs work on Solana. This is just a skim of the surface of the NFT market. For more information on NFT gaming, finding the top crypto communities to follow for advice, and more, see our previous blog posts.
All about Solana NFTs: how do they work?
An NFT (non-fungible token) is, essentially, a digital asset that is created on a blockchain network, like Solana, and which is uniquely encoded. The term “non-fungible” refers to any unique, one-of-a-kind item, like a custom painting.
By comparison, most commodities like gold or silver are fungible goods, which means they can be interchanged regardless of the item or service being exchanged.
NFTs are more than zeros and ones: they come in the form of images, video, and audio files. NFTs live on a blockchain, which is like a shared ledger that allows for decentralization and security. The blockchain keeps a record of every transaction, so each distinct owner of an NFT is recorded in the metadata of that NFT.
Solana is an open-source blockchain project that was first introduced in 2017. Its unique architecture is designed to optimize speed and affordability in a way that other blockchains hadn’t before. The key to Solana’s structure is a proof-of-history (PoH) protocol.
https://twitter.com/Cool_BullsNFT/status/1541106178486177796
PoH refers to a sequence of computations that creates a digital record that confirms the time and existence of any event on the blockchain network. That digital record is used to validate the authenticity of transactions on the network.
By combining a PoH protocol with a proof-of-stake (PoS) protocol — which allows transactions on the network to be verified using existing “stake,” or assets, in the blockchain — Solana reduces the workload on its algorithm. In short, transactions are much faster.
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NFTs on Solana vs NFTs on Ethereum
At the moment, there are two blockchains that are most popular for housing NFTs: Solana and Ethereum. Although NFTs can be created on any blockchain network, Ethereum has been the most popular so far. That is gradually changing.
Solana is relatively new, still. Ethereum is currently the second-largest blockchain, and was one of the first on the scene. With a market cap of $250B, Ethereum has more than 10x the market value of Solana. While Ethereum has a much larger, more established network, Solana’s game-changing architecture offers more speed and affordability.
NFTs on Solana tend to be less expensive (when calculated in US dollars) compared to NFTs on Ethereum. Transaction fees remain low on the Solana blockchain, and Solana charges fewer fees compared to Ethereum.
The Solana blockchain can process more than 65,000 transactions per second (TPS) without the need to scale the network. Ethereum, on the other hand, can only process about 30 TPS. The block time of Solana is only one second, compared to Ethereum’s block time of 15 seconds.
What is happening to the NFT market?
When the supply for any thing outweighs the demand for that thing, the economic outlook is bleak. Unfortunately, supply for NFTs heavily outweighs the demand.
According to one report, there are about five NFTs for every buyer. Some warn that the bubble of interest around NFTs is soon to pop. Others await a more prosperous future for NFTs.
In March 2021, an NFT of the first tweet from Twitter co-founder Jack Dorsey sold for $2.9 million to Sina Estavi, the chief executive of a Malaysia-based blockchain company called Bridge Oracle.
Estavi put the same NFT up for auction earlier this year and didn’t receive any bids over $14,000. Despite its plummet in value, Estavi didn’t sell the NFT. He told the Wall Street Journal that the auction wasn’t a sign of a crashed market, but a standard market fluctuation.
TRLab, an NFT art platform, stated in May that internationally-known artist Cai Guo Qiang would sell out his series of 7,000 NFTs. Qiang’s tokens have the capacity to help buyers create their own digital fireworks display.
So long as creators and developers continue to innovate new uses for NFTs, like NFT gaming, the precarious future of NFTs still has promise.
Learn more about the marketing uses and future of NFT gaming here.
What are the best NFTs on Solana?
As more NFTs on Solana gain traction, people are branching out to create NFTs on other networks, as well. For example, Snoop Dogg NFTs are housed on various blockchain networks, including The Sandbox and Cardano.
I picked up another @SolanaMBS @MonkeDAO today. I appreciate a couple things about SMB right now: The direction of the DAO, and that SMB influences a large amount of the Solana ecosystem. They are becoming (if not already) a critical part of the Solana's history and success. pic.twitter.com/UyHb2kQbFq
— Guitar (@GuitarCookies) June 26, 2022
For now, at least, Solana is still one of the most accessible options for entering the world of NFTs. Here is our list of the top five NFTs on Solana that you should consider right now:
- Solana Monkey Business: a dual collection of 5,000 randomly-generated, pixilated monkey images. Floor price was around 59 SOL, last we checked.
- Degenerate Ape Academy: this collection of 10,000 comically animated apes. The NFT community intends to foster social connection and levity. Floor Price is about 63 SOL.
- Frakt: utilizes randomly generated fractal art for images, and is the first of its kind. With a total of 12,588 NFTs, Frakt is the most affordable NFT on our list. Floor price is just under 3 SOL.
- Aurory: a free-to-play P2E (play to earn) game allowing users to trade more than 10,000 NFTs. Floor price for NFTs is around 40 SOL.
- Astrals: a DAO-style NFT project. Floor price is about 20 SOL.
For anyone looking to ride the Solana wave, there are countless projects to choose from, each with its own unique benefits. Before purchasing any NFTs on Solana, be sure to thoroughly research the NFTs’ creators, the stakeholders involved, and the perks and costs associated with each asset.
Read more about Snoop Dogg’s NFT ventures here.
Educate yourself before buying NFTs on Solana
Yes, there are innumerable celebrities and brands using NFTs, but that doesn’t mean the market is meant for everyone. For those who are not careful, NFTs can be risky investments that may lead to heavy losses.
Just like anything else, there is a learning curve when it comes to buying and selling NFTs. Unlike some things, however, NFTs are not exactly intuitive. Be sure to research the market thoroughly before making an investment.
Look for some of the best NFT YouTube channels for advice and updates on the ever-changing market. Join one of the many crypto Discords to find others who can share tips and advice to guide you. If you’re open to learning and willing to take a chance, the NFT game may be just your speed.
https://twitter.com/steveluscher/status/1540035190998720512
As for Solana, the future of this blockchain is still evolving. The company just announced in June the release of a mobile phone, which is a first for any blockchain. The company also released a new mobile development tool for users to build Solana applications on mobile devices. NFT enthusiasts should definitely keep their eyes on Solana.
