The Rise of NFTs – What’s Next? October 25, 2021 – Posted in: Blog, Coinsilium (COIN) – Tags: , , , , , , , , , ,

The respective values of Ethereum and Bitcoin increased by 15% and 14.8% in March – impressive gains by any standard. However, in the same period, shares in a blockchain and open finance venture company trading on the AQSE market increased by a whopping 325%. That company was Coinsilium (AQX: COIN, OTCQB: CINGF), which in 2015 became the first ever blockchain company to IPO. The company evolved from its original strategy as an investor and supporter of Blockchain companies into a Blockchain, Open Finance and Crypto Finance venture builder, and through partnerships is this year engaged in developing the next generation NFT platform for brands wanting to engage in the NFT arena, as well as projects within Open Finance.

The jump in Coinsilium’s share price was largely due to a press release on March 2nd, which revealed that Coinsilium had entered into a Memorandum of Understanding (‘MoU’) with Indorse Pte. Ltd, a Singapore company in which Coinsilium holds a 10% equity interest, to form a Partnership or Joint Venture called Nifty Labs in order to launch a Non-Fungible Token (‘NFT’) technology development studio in Gibraltar. It was also announced that Nifty Labs would develop smart contract systems for NFT applications including bridge for NFTs on Bitcoin using RSK technology, which once launched would potentially enable Bitcoin holders to seamlessly buy and sell NFTs.

Non-fungible tokens (NFT) are digital assets tokens which represent ownership through the ‘tokenising’ of items like collectibles, real estate, art etc. These NFTs are secured by the blockchain network, usually Ethereum, and can have only one official owner. No one can modify the ownership of the NFT or copy to create a new NFT.

 

 

An NFT can be an image, video or 3D, and uses of an NFT can include –

  • NFT as collateral in decentralized loans – Some decentralized finance providers will offer loans set against collateral. If you don’t pay back the loans, the NFT will be sent to the lender as collateral.
  • Maximising earnings for creators – NFT earnings are directly transferred to the creator when sold on the marketplace and might even receive royalties. This stands in contrast to artists / creators publishing artwork on social networks where the platform selling ads to followers of the artist make the money, while the creators just get the exposure
  • Tokenisation of gaming items where money can be recouped though selling any NFTs bought when you’re done with the game
  • Tokenisation of physical items like NFTs of deeds of property or cars which can be used to secure loans

 

Some examples of NFT images are –

 

Of course the oft asked question is.. ”If I can screenshot these NFTs why should I buy them?” I can screenshot and copy a Leonardo Da Vinci artwork from Google, but is it the same as owning a Da Vinci original? Of course not. NFTs follow the same logic and can easily verify the owner and the authenticity of the NFT.

Regardless of these and other questions over authentication and verification, NFT markets are growing apace with transactions in NFT’s tripling in 2020, reaching more than $250 million in total

Ethereum owns the largest cut of the booming NFT  market, which produced $10.67 billion worth of transaction volume in Q3 2021 alone (Decrypt, 2021) while there are very few Bitcoin NFTs on the marketplace. The reason for this is Ethereum uses smart contracts (contract written computer code which is needed to run NFTs and DeFi) whereas Bitcoin does not have smart contract capability, which until now has effectively blocked it from running NFTs and DeFi.

So Coinsilium’s announcement that Nifty Labs will develop the bridge for NFTs on Bitcoin using RSK technology proved to be a huge driver for the Coinsilium share price.

This project includes using the RSK network to create NFT tokens that would be linked to the Bitcoin network. The ramifications are clear: the security of NFTs will improve massively as the security provided by Bitcoin is still far much better than any other decentralised ledger, plus Bitcoin is still viewed by many as the original and best crypto currency and the most credible store of value. Coinsilium CEO Eddy Travia commented on the new project to build an NFT marketplace using the RSK network:

“The sector is fuelling a new wave of cryptocurrency adoption and we are confident that the Nifty Labs-developed NFT marketplace on RSK will demonstrate that Bitcoin, the most secure blockchain of all, will become a major part of the NFT success story.”

Furthermore, Crypto Currency exchange giant Coinbase recently announced its own plans to launch a marketplace that lets users mint, collect and trade NFTs – a sure sign of the appetite in the market if ever it was needed.

As the Ethereum based smart contract mainnet grows rapidly due to the booming NFT market, when Nifty Labs develops a RSK network based token bridge to set up a Bitcoin marketplace, holders can then buy and sell NFTs using Bitcoins. I’ve already highlighted how as the original and most widely held crypto asset, Bitcoin will definitely drive NFT’s values to the next level. I suspect this move will also serve to drive the value of Coinsilium shares too. I’m watching this space like a hawk. So should you.