NFTs - a use-case case study via "Blockchain Heroes"

in #cryptocurrency11 months ago (edited)

"NFTs" are non-fungible tokens. Sometimes called niftys or nefties, NFTs are different from fungible tokens.


Anything fungible means that each item is identical to one another. A gold nugget of one ounce is identical to another one-ounce gold nugget. Everything is the same and the value is the same. Those ounces are fungible...you would be okay trading one for another. However, if one of those ounces is actually an ancient gold coin, then it has become non-fungible...it's different. The values would not be the same. You definitely would not trade a one ounce ancient gold coin for a one ounce hunk of gold.

NFTs are digital tokens that are unique one from another. They are held in a cryptocurrency wallet like crypto "money". But, the difference is that, by the openness of a blockchain, they can be verified as unique from one another. One crypto coin is essentially the same as another (though their histories can actually differentiate them a bit).

An NFT can be proven to be entirely unique and it can be proven that you own that NFT.

You can learn a bit more about NFTs at nefties.com or about storing NFTs in a wallet here.

The emergence of Blockchain Heroes

The hosts of The Bad Crypto Podcast are creating "Blockchain Heroes" as NFT collectibles. This comes on the heels of the WAX blockchain's recent successful launch of Garbage Pail Kids collectible NFTs in partnership with the TOPPS card company. The NFTs sold out in 28 hours from TOPPS/WAX and have spawned secondary market sales ever since. WAX is somewhat new, at least to me, but seems very promising. I chronicled my dive into WAX here.

Blockchain Heroes is scheduled to go live August 4 and the premise is this...

There are a few dozen crypto superheroes that are out to save us all from the villains of centralization. Essentially, it's take the biggest names in cryptocurrency, 50 to be precise, turns them into superheroes, and place them on a baseball card, digital, NFT style. They can be bought, traded, re-sold, or HODLed, just like tangible collectible cards.

The artwork for Blockchain Heroes is pretty strong. Two samples are shown below and all of the characters can be seen at https://www.instagram.com/bcheroes/.


The Blockchain Heroes website is bcheroes.com but much of the "action" currently is taking place on Telegram at t.me/bcheroes where the hosts are unveiling the characters almost daily. As of now, they are about halfway through revealing the 50 "heroes" of cryptocurrency. Apparently, there will be differing variations of each card including gif animations.

A use-case case study in NFTs

I realize this kind of thing is not everyone's cup of tea. But, looking at the wider scope, I see a couple of things in play here.

Blockchain Heroes and Garbage Pail Kids offer a fine use-case example of NFTs which helps illustrate the power and potential that NFTs hold. They are taking an old use-case (trading cards) and applying it to a new technology (blockchain). Although the gif animations will offer a glitzy new look, the premise is essentially the same here...you can collect, trade, buy, sell, or keep collectible cards. Same as the old days.

NFT collectibles do offer a different, and better, angle to trading cards though. NFTs are even more non-fungible than physical, tangible cards.

Consider...suppose you have a Babe Ruth rookie baseball card. That's worth serious money. Maybe 1,000 cards were printed. On printing day, each was entirely identical...they were fungible between themselves...there was no difference between the one printed number 476 and number 477. They are still non-fungible in comparison to any other player's card (they're different as compared to a Yogi Berra card), but when comparing Babe Ruth cards 476 and 477, they are fungible (they're identical).

Suppose you wish to sell your Babe Ruth card. You find a potential buyer online. One question he or she will certainly ask is, "What condition is the card in?" You answer, "Well, it's okay, except for the coffee stain on his face and the corner that a mouse chewed off." Suddenly, that card #476 is not as valuable as the "identical" card #477 which is in mint condition. The two are not entirely fungible any longer. Here, they've actually become more non-fungible in a negative way...their uniqueness is due to a loss of quality.

The benefit of NFTs over tangible cards is that each NFT is verifiably different, even when minted. The card's minting number and trading history will always be provably unique. The "degree" of non-fungibility (uniqueness) is increased in this way. And, an NFT collectible, like Blockchain Heroes or Garbage Pail Kids, won't lose it's quality (no coffee or mice chewing).

Consider a three bedroom ranch house. They're common and they're typically similar (they're rather fungible). Imagine a whole neighborhood of similar ranch houses. They are usually priced about the same. But, what if that one pale yellow house was once owned by Marilyn Monroe, who sold it to Frank Sinatra, who sold it to Elvis Presley. The records of ownership could be looked up on county courthouse deeds to be verified. Suddenly, all of those "similar" ranch houses are not so similar. The celebrity house is non-fungible...and more valuable. Wouldn't it be cool to sit on the back patio of a three bedroom ranch room and sip a cool drink where Marilyn, Frank, and Elvis did the same thing? That yellow house is unique now, and more valuable.

The bigger picture

Trading cards on the blockchain as NFTs are only a stepping stone, the gateway drug. It is the bridge from horse-to-car. They are a bit of looking backwards to nostalgia, combined with a glimpse toward the future.

When cars first came out, they looked more like horse-drawn wagons, and were actually called "horseless carriages". This was because the paradigm was that a horse powers a wagon, thus a horseless carriage should look like a horse-drawn wagon, sans the horse. It was applying an old technology to a new technology.

As another example, I'm typing this on a QWERTY keyboard on a laptop computer. Many agree that the QWERTY layout is not ideal for efficiency (why are the most common letters typed by my left hand?), and the layout makes little logical sense. This layout is a carryover from the mechanical typewriter days. The QWERTY layout was to slow down a typist so that the "hammers" that physically pounded the paper and printed the letters could keep up with the typist. Else they'd jam. So, the not-so-efficient QWERTY is taking and old technology and applying it to a new technology.

In days to come, NFTs will be so much more than just digital, collectible trading cards. The potential is immense.

Some possible use-cases...

  • tickets - Imagine if your front-row seat to an awesome concert could be (a) proven that it's legit and (b) re-sold. Scam-scalpers are not happy.
  • land deeds - Forget the trip to the courthouse; the Florincoin blockchain, which is not-so-well known but fantastic, is already putting this to use, I believe in Wyoming. To be clear, they're not using NFTs, but only blockchain.
  • stock shares
  • shares of ownership in...anything (real estate, weekend getaway nights, a person's contract or earnings)
  • artwork - Imagine you buy a fantastic copy of Starry Night. It looks 100% like Monet's. You try to sell it. Maybe you could fool someone into thinking it's the real one. But with NFTs, you could not fool anyone...they'd simply look it up on the blockchain, and you're busted. Also, maybe you can't afford the painting, but you might be able to buy a 10% stake in it...
  • really, just about anything can be "tokenized" or split into shares of ownership from 100% ownership down to any fraction of ownership

Can you think of more?