This model presented a problem because the companies and agencies had to share the money made and the rights to the creative works the professional produced. In summary, the creatives were sometimes short-changed.
This is a unique problem, and like many problems in the past, the cryptocurrency space came up with a solution—the inception of the non-fungible token (NFT). NFTs are a new type of digital asset that helps creatives and other professionals to be in charge of the rights to their works 100% and monetize it as they desire. However, to understand how Ethereum is losing its place in the NFT marketplace, you need to understand what NFTs are first.
What Are NFTs?
An NFT stands for a non-fungible token. It is a unique digital representation of a real object, and it is hosted on a blockchain. Unlike other types of crypto assets, NFTs cannot be traded for another token. This is the reason why they are termed as non-fungible.
The object that is tokenized when we talk about NFTs can be a wide range of objects. This could include real objects such as a painting or a picture or something digital like a video clip, a tweet, a sound, or more. The core use of the non-fungible token technology is to ensure that the creator has proof of ownership of his/her work in an immutable way. This is why the blockchain plays a crucial role.
Without the immutability offered by blockchain technology, pirated copies of the digital work can be easily produced and distributed without the knowledge of the creator. Hence, to protect the right of the owner and differentiate between the original work from the copies, NFTs are usually defined by their unique ID codes.
To gain a better understanding of the non-fungible token concept, consider it to be an autograph from a celebrity on a piece of paper. However, in this case, the owner of the autograph is the celebrity. The owner can create as many copies of the NFTs as desired, just as they can do with an autograph.
However, unlike autographs, where someone can forge the owner’s signature, it is impossible to do the same with an NFT since the codes are non-fungible and cannot be transferred or forged. It is this unique feature that has made NFTs gain rapid adoption, especially within the sporting and move industries.
The Ethereum Network and its Role in the NFT Boom
The Ethereum network is considered to be web 3.0. It houses some of the oldest and latest innovations within the cryptocurrency space. The rise of initial coin offerings (ICOs) wouldn’t have been possible without the Ethereum blockchain.
The Ethereum blockchain is also responsible for the emergence of other key trends in the cryptocurrency space, including decentralized finance (DeFi) and, of course, non-fungible tokens (NFTs).
Most of the non-fungible tokens were developed, issued, and sold on the Ethereum blockchain. It remains the leading smart contracts platform in the world. However, the Ethereum network has a lot of negatives that have hampered the growth of the blockchain, and some decentralized applications hosted on it. As such, other smart contract blockchains have sprung up and are now providing better services to the developers and one of those leading networks is Tezos.
Why Tezos is Becoming the Home of NFTs
The Ethereum network is losing the NFT war due to some of its features. One of the biggest problems of the Ethereum network is the high gas fees. The lack of scalability of the Ethereum blockchain has caused several projects to migrate to other networks. Those that stay on the Ethereum blockchain have to contend with paying high network fees.
The emergence of other blockchains such as Tezos has made it easier for creatives to launch their NFTs. They can monetize their artwork and other digital pieces and make maximum money without paying too much in transaction fees.
The Ethereum network is currently migrating from a proof of work (PoW) protocol to a proof of stake (PoS) protocol. This is expected to solve its scalability issues and make the Ethereum blockchain more user-friendly.
However, at the moment, the Ethereum blockchain is losing DeFi protocols and NFTs to blockchains such as Tezos. McLaren Racing is one of the leading names to launch an NFT platform on the Ethereum blockchain. Golden Goal is another popular name that launched an NFT on the Tezos blockchain.
Other popular names to launch non-fungible tokens on the Tezos blockchain include football club FC Nantes, OneOf, and more.