Cryptocurrency Boom and its Derivatives


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Frankfurt, Hesse, Germany – April 17, 2018: Many coins of various cryptocurrencies, including Bitcoin, Ethereum, and Litecoin.

This past year cryptocurrency has become more relevant.  Cryptocurrency has been increasing in value ever since the first cryptocurrency entered the market. That currency was Bitcoin and it first became public in October 2009 and gradually increased to the current price of 56 thousand dollars per one Bitcoin. After the success of Bitcoin, a number of other cryptocurrencies were established, including Ether, Solana, Cardano, Dogecoin, and various others. Top cryptocurrencies are continuing to grow and attract more investors.

The relevance of Crypto has surged in recent years and become increasingly mainstream, with the recent change of Staples Center to Arena and popular celebrity Twitter profiles changing their profile pictures to NFT’s that they purchased. A prime example of this is from the company of FTX which is a market place for cryptocurrency traders. FTX has been prominent in partnering and sponsoring with many sports and influencers in the United States, including their partnerships with Major League Baseball, the Mercedes-AMG Petronas F1 team, Stephen Curry, and TSM. They have also rebranded the American Airlines Arena to FTX Arena, the new arena for the Miami Heat. The sponsorships and partnerships with many influential people in the world have further accelerated the popularity and value of the cryptocurrency market.

Cryptocurrency has created opportunities for talented people in online spaces. Artists of all kinds can now sell their work through a website called OpenSea for cryptocurrency to make a living. Items that are sold on OpenSea are called NFT’s short for Non-Fungible-Token. According to the Merriam-Webster dictionary, an NFT is a “unique identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, that is used to certify authenticity and ownership [of the NFT.]” NFT’s are sold in collections of a couple of thousands. Each NFT is unique and are created on certain criteria. NFT collections can be focused on visual traits that are based on the physical features of the NFT or could be focused on creating a general theme throughout. For example, a collection that is trait based is the Bored Ape Yacht Club (BAYC) which consists of about 170 traits such as facial expressions, headwear, clothing, backgrounds, eyes, and many more traits. Some of the more famous NFT projects are the Bored Collections consisting of the Bored Ape Yacht Club, the Bored Ape Kennel Club, and the Mutant Ape Kennel Club collection. Certain NFT clubs like the BAYC will provide royalties for owning and being a member of the club of NFT’s. According to an article on CyberScrilla, owners of NFT clubs earn anywhere around 5 to 10 percent in crypto from each time the NFT is sold after it has been minted. Minting is the process of buying the NFT first from the artist or creator themselves.

While it may seem hard for artists to compete with such popular and expensive collections, they can create NFT projects that are similar called Derivatives. Derivative NFT projects are collections mimicking the original projects and can partner with the original creators; this can cause an increase in attraction and can increase the NFT’s price, as they’ll be associated with the original project.

The Crypto and NFT business consists of various transactions and trading, ultimately to profit by owning several NFTS and selling them to prospective buyers. While transactions may seem straightforward, they also have a particular process. To put it simply, the transactions are conducted through blockchains of certain cryptocurrencies and then are handled between two parties with two separate cryptowallets including a “gas fee”, the computational effort required to process each transaction on blockchain, according to NFTEVENING. The more complex it is to verify a transaction the more “gas” it will cost. This is what sustains crypto miners and the NFT Market; without them, there would be no Cryptocurrency or NFTs.

With the Boom of the cryptocurrency market, there is no telling how big the business will be. Ever since reaching the three trillion dollar mark crypto still shows accelerating growth. Although the market remains volatile and could fluctuate, as it  did during the first weeks of December, it will evidently prove to be a great investment for all people.