Whether it’s baseball players or shiny Pokemon cards, collectibles have been a staple of human behavior since the Renaissance. Movie souvenirs or celebrity clothing can be auctioned for fantastic amounts. Take the prototype Batmobile from the 1960s Batman series that sold for $ 4.2 million. The very concept of collecting is simple: an item whose value depends on rarity. The lower it is, the higher the value.
This concept is driving the explosive growth of non-collapsible tokens (NFT). NFTs, mainly bought and sold on the Ethereum blockchain, are digitized stocks. Whether it’s the hugely popular and limited CryptoPunk avatars or Jack Dorsey’s first tweet, NFTs are big bucks and those who manage to hijack a rare NFT will always have proof of ownership as that data lives on the blockchain.
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But how easy is it to get an NFT?
Gas is not cheap
Just like Bitcoin (BTC) and Ether (ETH), NFT can only be obtained through mining. For savvy buyers and sellers in mining and paying for gas – the amount someone has to pay to process their cryptocurrency transactions is nothing new. For beginners who have plunged into NFT water, the mining process may seem like an ugly shark bite.
While not common practice, quite a few NFT runs use a correlation curve to determine the price of the NFT. This creates liquidity in the NFT market. In layman’s terms, this means that the price of an NFT asset is determined only by a limited block volume. With the ever-increasing demand for blocks like Ethereum, network fees tend to rise.
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If you are a miner, you can decide which transactions are high fees, so miners cover their pockets at the buyer’s expense. Now this situation is normal for cryptocurrency holders. However, for some who are new to cryptocurrency, a mining failure can be confusing, unacceptable and deeply unfair, which is not entirely counter-intuitive if you are new to the market.
So how can this power imbalance be reversed so that new NFT buyers do not suffer from high gas taxes?
Shop somewhere in line
When we launched NFT, which ignores us and digitized the infamous emoji that has become a popular cultural meme, it was well aware of the issues mentioned above. Ultimately, we had to find a way to reduce network activity, and hence gas taxes, as hundreds of people tried to mine NFT. Early NFT platforms struggled with transaction processing flows, which could lead to stressful situations for buyers and the higher gas fees they needed to approve a transaction.
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The answer to these unresolved problems lies in the implementation of a queuing system. Several NFT platforms have built infrastructure that can increase the speed of blockchain transactions, leading to an improved user experience. Implementing a protocol that requires buyers to queue for their NFT coin while it has time to do so will eliminate major inconsistencies throughout the coin’s process, which will worsen buyers’ plight.
The queuing system creates a fairer market as it reduces the likelihood that customers will compete for the same NFTs and lose gas taxes. As the popularity of NFT continues to grow and capture the public imagination (and our wallets), it is important that NFT platforms make blockchain-hosted markets a fairer and more attractive place for shoppers looking for the latest digital collectibles.
Whales dominate the market
Despite the hype and the huge amount of money circulating in the NFT space, the “average” price of NFTs sold on SuperRare is 2.15 Ether, or about $ 5,800 according to OpenSea ratings. The question arises: who exactly buys NFT? Most likely, for the first time, buyers will be paid by a small group of buyers with deep cryptocurrency pockets?
Even the implementation of a waiting list system does not change the fact that cryptocurrencies are largely dominant in the market. As the name suggests, cryptocurrencies refer to individuals or legal entities that own a large amount of bitcoins or other cryptocurrencies. This is a problem in the broader field of cryptography, as it means that people with enough bitcoins have the ability to manipulate the value of coins.
Especially with NFTs, most of the people who buy these non-fungal tokens are crypto whales. For example, only 2.3% of sellers in the Rarible marketplace account for 50% of NFT sales.