User:Briannlongzhao/sandbox

Lead-in (moved to live)
A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright.

The idea of using blockchains to secure digital assets in the early 2010s led to the first notable usage of NFTs only a couple of years ago in 2017. Since then, there has been an increased interest in using NFTs. Blockchains like Ethereum, Flow, Tezos, and dGoods have their own standards when it comes to supporting NFTs but each works to ensure that the digital item represented is authentically one-of-a-kind. This exclusivity of ownership is what gives NFTs value and has resulted in increased speculation. NFTs are now being used to commodify digital assets in art, music, sports, and other popular entertainment. NFTs are also being used to verify records in financial and healthcare systems.

The popularity of NFTs has led to a growing impact on the cryptocurrency economy. The NFT market value tripled in 2020, reaching more than $250 million. The rise of NFT transactions has also led to increased environmental criticism. The computation-heavy processes associated with proof-of-work blockchains, the type primarily used for NFTs, require high energy inputs that environmental activists argue are contributing to global warming. The carbon emissions produced by the energy needed to maintain these blockchains has forced some in the NFT market to rethink their carbon footprint.

Description (moved to live)
A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies any digital file to be unique. An NFT functions like a cryptographic token, but unlike cryptocurrencies such as bitcoin, are not mutually interchangeable, in other words, not fungible. NFTs are created when blockchains string records of cryptographic hash, a set of characters that verifies a set of data to be unique, onto previous records therefore creating a chain of identifiable data blocks. This cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that is used to track NFT ownership. However, data links that point to details like where the art is stored can die. Also, ownership of an NFT does not inherently grant copyright to whatever digital asset the token represents. While someone may sell an NFT representing their work, the buyer will not necessarily receive copyright privileges when ownership of the NFT is changed and so the original owner is allowed to create more NFTs of the same work. In that sense, an NFT is merely a proof of ownership that is separate from a copyright.

Standards in blockchains [Brian] (moved to live)
Specific token standards have been created to support the use of a blockchain in gaming. These include the Ethereum ERC-721 standard of CryptoKitties, and the more recent ERC-1155 standard. The Flow blockchain also supports NFTs on a Proof of Stake consensus. NFT runs on blockchains platforms with different standards that have different functions to support a variety of uses.

Ethereum
ERC-721 was the first standard for representing non-fungible digital assets on the Ethereum blockchain. ERC-721 is an inheritable Solidity smart contract standard, meaning that developers can easily create new ERC-721-compliant contracts by importing it from the OpenZeppelin library. ERC-721 provides core methods that allow tracking the owner of a unique identifier, as well as a permissioned way for the owner to transfer the asset to others. It is one of the most common standards used, but it could be inefficient depending on the use case. The blockchain game Cryptokitties is built on the Ethereum platform using ERC-721.

ERC-1155 standard was created by team at Enjin. The ERC-1155 standard offers "semi-fungibility", as well as providing a superset of ERC-721 functionality (meaning that an ERC-721 asset could be built using ERC-1155). Unlike ERC-721 where a unique ID represents a single asset, the unique ID of an ERC-1155 token represent a class of assets, and there is an additional quantity field to represent the amount of the class that a particular wallet has. The assets under the same class are interchangeable, and user can transfer any amount of assets to others. ERC-1155 could be efficiently used for blockchain gaming, because it reduced the amout of data transfered for massive transaction of in-game assets of a same class. This means assets are fungible to each other within a same class, and the transaction of individual asset could not be traced.

Flow
Flow is the blockchain network designed and built for NFT collectables and blockchain gaming using a proof-of-stake model. On the Flow blockchain, created by the team behind Cryptokitties, the Cadence programming language represents each NFT as a resource object that users store in their accounts. Resources have important ownership rules that are enforced by the type system. They can only have one owner, cannot be copied, and cannot be accidentally or maliciously lost or duplicated. These protections ensure that owners know that their NFT is safe and can represent an asset that has real value. Flow applis pipelining in the validation of transaction so that user actions could be handled atomiclly with higher effciency. The NFTs standard on Flow is the equivaent of ERC-721 tokens on Ethereum. The blockchain game Cryptokitties will migrate from Etherum blockchain network to Flow network with new features.

Tezos
Tezos is a blockchain network that operates on proof of stake and supports the sale of NFT art. The FA2(TZIP-12) of Tezos is a token standard proposal similar to the Ethereum ERC-1155 standard. It describes a contract that support both fungible and non-fungible tokens, as well as other self-invented token types via standard APIs. After Ethereum, Tezos is the second blockchain platform supported by the largest NFT marketplace OpenSea.

=== dGoods === dGoods is an NFT standard collaborated by Mythical Games, EOS Lynx, Scatter, and other key blockchain firms. It was initially developed for the EOS comunity, but is also compatible with other blockchiain platforms.

Market value (moved to live)
The NFT market has seen rapid growth recently with its value tripling to $250 million in 2020. In the first three months of 2021 alone, more than $200 million were spent on NFTs. The economic momentum NFTs have in the cryptomarket has exploded because of a trend towards digital collectibles. NFTs are also accelerating a larger trend of digital economic innovation as the public is increasingly favoring a crypto-economy.

Current (how NFTs are being used currently)

 * Financial Systems
 * Banking/Digital Wallets
 * Games
 * Digital Art
 * Collectibles
 * Music

Future

 * Healthcare Systems
 * Decentralized File Storage
 * Decentralized Data Feed
 * Cloud computing

History [Jiefan] (moved to live)
In 2012, the idea of issuing assets onto blockchains was first created by Yoni Assia and realized in the form of Colored Coins, small units of bitcoin that could represent a multitude of assets.

In 2014, Counterparty, a peer-to-peer financial platform, was founded and built on top of the Bitcoin blockchain and attracted various projects including trading card games and meme trading in the following years

In 2017, Ethereum started to gain prominence and American studio Larva Labs released CryptoPunks, a project to trade unique cartoon characters, on the Ethereum blockchain. In late 2017, another project called CryptoKitties where players adopt and trade virtual cats was released and quickly went viral, raising a $12.5 million investment and some kitties were selling for over $100,000.

After witnessing the CryptoKitties spree, people began to realize the potential of NFTs and so the NFT market saw massive growth in the following years, with more than 100 projects introduced in 2018 and 2019

In 2018, Decentraland, a blockchain-based virtual world, raised $26 million in an initial coin offering, and had a $20 million internal economy as of September 2018.

In 2019, Nike patented a system called CryptoKicks that would use NFTs to verify the authenticity of physical sneakers and give a virtual version of the shoe to the customer.

In early 2020, the developer of CryptoKitties, Dapper Labs, released the beta version of NBA TopShot, a project to sell tokenized collectibles of NBA highlights. The project was built on top of Flow, a newer and more efficient blockchain compared to Ethereum. Later that year, the project was released to the public and reported over $230 million in gross sales as of February 28, 2021.

In 2021, interests in NFT continued to spike and a number of high-profile sales were made just in the first few months. In February 2021, the musician Grimes sold around $6 million worth of tokens representing digital art on Nifty Gateway. Later that month, an NFT representing the meme animation Nyan Cat was sold in an Internet marketplace for just under $600,000. On March 11, 2021, American digital artist Beeple's work Everydays: The First 5000 Days became the first NFT artwork to be listed at prominent auction house Christie's and sold for $69.3 million. In March 2021, Jack Dorsey, founder of Twitter and Square, sold an NFT representing his first tweet for over $2.5 million. The speculative market for NFTs has led more investors to trade at greater volumes and rates.

Popularity
The first notable NFTs in circulation date back to June of 2017 with CryptoPunks, a project developed by Larva Labs, where users could claim unique digital avatars. The digital avatars started out free until increased demand caused the cost to jump to the thousands. Similarly, in 2017, NFTs circulated by CryptoKitties, a project developed by Dapper Labs to sell ownership of unique cat avatars, jumped so much in popularity that a surge in demand took up significant transaction space on the Ethereum blockchain and slowed the entire Ethereum network in December of that year.

NFTs have become increasingly popular in the early months of 2021 because of recent high-profile sales. Some notable NFT sales in 2021 like NBA Top Shot’s video clip of LeBron James selling for $208,000 on February 22, 3LAU’s album bringing in $11.6 million in sales as of February 28, and digital artist Beeple’s piece selling for $69.3 million on March 11, have made NFTs an especially current topic in popular culture. In March of 2021 alone, NFT sales exceeded $220 million making up nearly half of all-time NFT sales ever at the time. This renewed interest in NFTs, particularly those in art, music, and sports, have made way into mainstream consciousness, especially amongst the younger generation. In a March 27, 2021 Saturday Night Live episode, cast members even poked fun at this growing niche with a comedy skit on NFTs.

As the NFT market expands, demand for these unique digital assets have exploded and is expected to grow in the future. Many investors are willing to pay high rates to secure and promote NFTs and continue to do so because they anticipate NFTs to be the biggest and most profitable collectibles of tomorrow. The growing value of NFTs is redefining the major entertainment industry of today. Investors like Mark Cuban have already begun to propose new ways of implementing NFT technology to monetize sports tickets and merchandise sales.

Contemporary art
The growing use of NFTs is opening up new possibilities in contemporary art. There is a lot of potential in cryptoart in the art industry for artists, buyers, and collectors. NFT marketplaces exist as sites that facilitate the transactions between all those interested in cryptoart. These online communities give artists the chance to create and sell digital artwork that there might not have been much of a market for otherwise. The blockchain technology used in NFTs also provide artists with proof of historical provenance which validates the creation of one-of-a-kind cryptoart that cannot be forged. This digital ledger system even allows artists to attach royalty agreements to their NFTs that entitle them to a percentage of the profits made every time ownership of the asset is transferred. NFTs are consequently changing the way modern artists can earn a living. The value of tokenized cryptoart then is found in the exclusivity of ownership. While buyers may not hold the copyright of the cryptoart they purchase, they do receive the guarantee of authenticity that comes with owning it. So, collectors must rely on the value of rarity when investing into speculative assets like NFTs. As such, NFTs challenge the norms of contemporary art with an approach to creative expression that is entirely digital and certifiably unique thereby pushing the art world into new territory.

Environmental concerns [Alicia] (moved to live)
Environmental activists argue that the high energy input and computation-heavy processes associated with the blockchain technology used for NFTs are responsible for some of the carbon emissions heating up the climate. The proof-of-work required to regulate and verify blockchain transactions, which include NFT sales and purchases, consumes a large amount of electricity which releases a heavy amount of greenhouse gas. In recent years, a number of estimates from various studies equate the carbon emissions of blockchain processes to be around a couple hundred megatons. While Ethereum acknowledges that blockchain technology is energy intensive, they argue that the carbon footprint associated with creating blocks is not directly the fault of NFTs as the entire system depends on heavy energy usage.

Mitigation efforts
The rise of NFT transactions on the Ethereum blockchain recently has compelled many in the market to think critically of their carbon footprint. Some NFT marketplaces have announced commitments to sustainable practices and in some instances now give buyers the option of contributing to carbon emission offset programs at checkout. One NFT marketplace was scrapped entirely before launch in response to widespread environmental criticism online. In some instances, NFT artists have decided against selling some of their own work to limit carbon emission contributions. To help combat climate change related to blockchain transactions, CryptoKitties created Flow as a new type of blockchain validation to mitigate carbon emissions with a less machine heavy proof-of-stake model that requires less energy consumption than Ethereum’s blockchain model.