Last week CYBAVO announced that we now offer a comprehensive turnkey NFT solution for enterprise wallets.
But what exactly are they? To the uninitiated, NFTs may seem like a rich man’s digital plaything, to regulators, a possible money laundering vehicle, but if you actually dig deeper into the technology and its potential applications, you’ll find that it’s nothing short of revolutionary.
This includes its cutting-edge custodial platform CYBAVO Vault,mobile app CYBAVO Wallet and wallet software development kit (SDK). The company will also unveil support for ERC1155 soon.
CYBAVO’s digital asset storage is protected by multiple layers of security, including biometric and SMS verification mechanisms, as well as multiparty computation (MPC).
This article looks at the rise of NFTs, their history, biggest success stories, disruption of established industries, security risks and how they can be safely stored on CYBAVO’s platform.
What are NFTs?
A Non-fungible Token (NFT) is a crypto asset stored on a distributed ledger with unique digital codes that make them distinguishable from one another, making them non-interchangeable.
A fungible token like Bitcoin, Ether, Polkadot or even Doge can be exchanged for any other token of their kind on their blockchain.
Non-fungible tokens, most often minted and stored as ERC721 tokens on the Ethereum chain,on the other hand are unique and indivisible, such as artworks, virtual treasures in games, or even real estate or red wine certificates. When you trade a non-fungible token with someone else, you will no longer own it.
Non-fungible tokens, therefore, cannot be used as digital currencies since they cannot be traded with equivalence. However, they have broad disruptive applications across several industries including art, music, real estate, domain names, gaming, and many more.=
Why are NFTs “non-fungible?”
Since NFTs are issued on the blockchain, as long as the chain still exists, the record of your NFT will not be tampered, wiped out, or disappear. In the contract for issuing NFT, the identification information of this token will be recorded.
The record will include an ID string or more information, which is marked to prove the specific assets that the token can represent. This information can not be altered, as mentioned earlier. Each NFT is unique, immutable, and has indivisible characteristics, making it inherently able to be linked to specific assets to prove the nature of asset ownership.
A Brief History of NFTs
The possibilities of NFTs first appeared in 2012 through a paper by Yoni Assia, fronting Colored Coins derived from Bitcoin, which represented unique items such as property, coupons, and subscriptions. Unfortunately, it didn’t gain much traction due to the limitations of the Bitcoin network.
When the Ethereum blockchain gained more ground in 2017, products with NFT-like features such as Rare Pepes moved to Ethereum and found success thanks to the platform’s ability to run complex applications, which allowed NFT creators and projects to thrive.
Crypto Kitties was the first wildly sensational NFT project whose popularity caused the Ethereum network’s traffic to spike, congesting its blockchain in the process.
NFT projects laid low for a while after the 2018 market crash while the top projects continued to build. And while there have been a few milestones hit, it wasn’t until near the end of 2020 where NFT discussions and activities started to heat up again.
Since late last year, newly discovered projects like CryptoPunks, which claims to be one of the original NFT projects on the Ethereum, have seen crazy price spikes, with its ultra-rare “Alien” NFTs going for multi-millions.
Which industries are disrupted by NFTs?
The NFT fever has spread through various sectors. Let’s take a look at some of the most NFT-transformed industries.
- Art – Art is the most influenced space for good reason. NFTs allow artists to create a digital representation of their works or sell their digital art in the open market, giving them the option to offer single or multiple editions of their pieces. Furthermore, they can perpetually earn a commission for every resale of their artwork, which is a new dimension of monetization the art world has never experienced at scale before.
- Real estate – NFT projects in real estate enable ownership and trading of both physical and digital land. In the real world, properties can now be tokenized.
Meanwhile, virtual games like Axie Infinity and Decentraland allow players to buy, sell, and own digital land. Digital landowners get to enjoy certain perks such as the right to develop their land, with its value mimicking physical rules. For instance, virtual real estate appreciates in value depending on the surrounding amenities.
- Collectibles – Collectibles traditionally involve rare items such as cars and watches. NFTs bring this industry to the blockchain by allowing digital collectors to own rare items such as Cryptokitties, NBA Topshot, Cryptopunks, and many more.
Biggest NFT Success Stories
Let’s explore some of the most significant, successful, and priciest NFT projects to date.
- Hashmasks – 16,000 masks made by a decentralized team of artists with prices reaching over 400 ETH, based on attributes
- CryptoPunks – CryptoPunks’s elementary pixelated characters became popular through crypto social media influencers and free airdrop for Ethereum (ETH) holders.
- Beeple art – Beeple is a digital artist who started creating digital artworks every day since 2007. Beeple’s NFT uniqueness is that it provides rare numbers and purchasers have to bet on their price in an auction.
In 2021, His“The First 5000 Days,” a compilation of his first 5000 digital artworks, sold for a whopping $69 million paid in ETH.
- NBA Top Shot – NBA Top Shots are basketball collectibles made up of video clips of action in NBA games. NFTs like LeBron James’ top shot has sold for $200K. By March 2021, NBA Top Shots generated over $230 million in sales.
- CryptoKitties – Treasured for their unique attributes and collectibility, CryptoKitties has set the pace since 2017 on how to create and monetize NFT collectibles.
How to Buy and Store NFTs for Enterprises
While cryptocurrencies trade on digital currency exchanges, NFTs have special marketplaces that are better suited for trading non-fungible assets such as Rarible, OpenSea, and Nifty Gateway. It is recommended to buy from these platforms instead of making NFT deals with strangers online in order to avoid being scammed.
Connect to a reputable NFT Marketplace
Joining an NFT marketplace requires having a Web3 wallet such as MetaMask or WalletConnect, which is supported by the CYBAVO wallet app. If you are an enterprise or large-scale organization, or even a risk-averse NFT collector, it is recommended to use a secure wallet like CYBAVO in order to safeguard your funds.
If you want to buy in Opensea, head over to their website and connect your CYBAVO wallet or whatever supported wallet you have.
Be sure to have ETH or other supported cryptocurrencies in your wallet first. If not, you can fund your account through an exchange or from another wallet.
After choosing an NFT, the next step is to purchase it. NFT marketplaces take an auction approach where buyers need to express their willingness to purchase by placing a bid on their preferred piece. Once you have successfully purchased your NFT, you will receive it in your wallet shortly.
Like cryptocurrencies, compatible cryptocurrency wallets are used to track and control NFTs via private keys as these tokens reside on a smart contract. Popular wallets for storing non-fungible tokens includeMyEtherWallet, and MetaMask.
Enterprise NFT Wallets
Security Threats: Can NFTs Be Stolen?
Yes, NFTs can be stolen. Despite being non-fungible, their security threat is similar to digital currencies. Just as crypto exchange hacks lead to the loss of cryptocurrencies, an NFT marketplace is also vulnerable to security breaches, which would lead to stolen digital artworks.
In the past, hackers have managed to get into Nifty Gateway and steal virtual artworks. In a statement, the marketplace said that compromised accounts missed the two-factor authentication. Furthermore, the malicious actors reused login details they fetched from other services.
Apart from hacking, scammers may impersonate famous figures by creating accounts using their names and other publicly available credentials.
NFTs may also potentially disappear if the token linked to the smart contract is stored on a centralized platform, which could get shut down. Therefore, it is crucial to choose for enterprises to choose a wallet solution that is compliant with regulations if you choose to go down that route.
How to Provide NFT Security for Retail and Institutional NFT Collectors
CYBAVO announced last week that it is extending its security features to NFTs.
While most wallets continue to enhance their security to cater to NFTs, many of them are yet to fully crack the code on how to secure this new asset class. This leaves the door open to established digital asset custody solutions like CYBAVO to fill this gap.
CYBAVO Offers NFT Support for both Ethereum and Binance Smart Chain (BSC)
Unlike other wallets, the CYBAVO wallet is protected by multiple layers of security including biometric and SMS verification mechanisms.
Additionally, CYBAVO has added the same functionalities on the CYBAVO Vault for institutional NFT collectors. Notably, the two wallets can store NFTs built using Ethereum’s ERC721 standards and the soaring Binance Smart Chain’s BEP-721.
CYBAVO Vault allows the addition of NFT tokens through the “Currency>Add” option. Moreover, this route opens the door to the creation of an NFT storage ecosystem inside the wallet.
CYBAVO to support next-gen ERC1155 tokens soon
CYBAVO is already looking to the future and next-generation NFT iterations. In the next release, ERC1155 tokens will be fully supported by both storage applications.
ERC1155 is a multi-token standard that will enable the creation of every type of asset, from digital currency, real estate to digital art and gaming items.
How to store NFTs on CYBAVO Wallet
Simply download the APP , add related NFT assets through the NFT asset field, and begin exchanging and trading NFT assets.
If you have any suggestions or needs for NFT assets, please feel free to contact us.