Blockchain Resources – Page 7

An NFT or non-fungible token is a unique one-of-one digital asset that allows for proof of ownership because it is stored on the blockchain. NFTexplained.info is a team of long term crypto investors with blockchain experience; in this article we will explain everything related to burning or destroying an NFT. An NFT can’t be ‘deleted’, however it can be ‘burned’. Once an NFT is minted or uploaded to the blockchain, it is considered immutable; this means it will exist on the blockchain forever. An NFT can be ‘burned’ by being sent to an inaccessible address, as it is removed from circulation. If you are interested in becoming an NFT expert, by learning precisely what they are and how they work, that article can be found here. An NFT is stored on the blockchain which is a peer-to-peer database where all users can see the owner; this allows for verifiable ownership. The architectural nature of the blockchain is built so that all transactions can be seen and verified by everyone on the blockchain. This makes it impossible for people to tamper data (or the blocks) in the blockchain. ‘Deleting’ an NFT is not possible due to the nature of the blockchain; however, ‘burning’ an NFT is possible by sending it to an address that nobody possesses. While the NFT will still exist on the blockchain, there will be no way of accessing it and therefore it is considered ‘burned’ or removed from circulation. NFTexplained.info will break down what it means to ‘burn’ an NFT. This includes how to burn an NFT, the address that can be used for burning, why someone would burn cryptocurrency or NFTs, and review how to delete an NFT on OpenSea. We will end our article by explaining why NFTs have value and what adds to the value of an NFT. How Do I Burn An NFT? As the team previously mentioned, it is not possible to delete an NFT once it is minted on the blockchain; however, an NFT can be removed from the ability to be on a marketplace if it is sent to an unreachable address. In order to burn an NFT, it must be sent to an inaccessible digital wallet address. Wherever the NFT you intend to burn is stored, click on transfer and enter a black hole wallet address (e.g. 0x000…). The NFT will still exist on the blockchain however it will never be able to be accessed. 0x0000000000000000000000000000000000000000 is the most commonly used black hole or burn address where people send cryptocurrencies as well as NFTs. While this does incur some gas fees it will essentially remove the digital asset. Why Would Someone Burn Cryptocurrencies Or NFTs? Burning an NFT or cryptocurrency seems like an absurd decision for most. While the average holder will most likely choose not to partake in this action, large, crypto-based companies may do this. Crypto corporations may choose to burn NFTs or cryptocurrencies as a way to adjust the supply that is available to the open market. Reducing the supply to a line of NFTs or a currency will likely drive an increase in demand due to increased scarcity. Price increase is likely the decision driver. Large corporations such as Binance, a cryptocurrency exchange with an NFT marketplace have already burned roughly four million BNB tokens. When the Binance token launched, they announced a commitment to burn 100 million BNB to reduce supply and increase demand. If you would like to learn more about the Binance NFT marketplace and the unique features they offer, that article can be found here. Other large crypto corporations have also participated in the burning of their cryptocurrency to reduce supply. If you take a look at the black hole address NFTexplained.info stated earlier, you would be surprised by the amount of money that has been burned. If an already established line of NFTs were to begin burning some of the NFTs they had minted, it would most likely make people somewhat confused (maybe even upset) while making the NFTs that were not burned more valuable. How To Delete An NFT On OpenSea Once a transaction has occurred on the blockchain, such as the tokenization of an NFT, it is not possible to remove that item from the blockchain. An NFT can only be deleted if it’s not minted. On OpenSea, hover over your profile logo (top right of screen). Click ‘My Collection’ and then the collection holding the NFT you would like to delete. Hover over the item you would like to delete and click ‘...‘, 'edit', then click ‘Delete Item’ (at bottom). Screenshot showing where to find the edit section for an NFT that has not yet been minted on OpenSea. The next step would be to hit 'edit' and then 'delete'. This is also the same process you would use to edit the NFT (e.g. external link and description). These changes can be found in the same location before the ‘Delete Item’. Currently, there is no button that pops out giving you an option to delete an unminted NFT so hovering over the NFT is the only way to access this feature. If you would like to learn more about OpenSea, such as how the company generates revenue and how to set up OpenSea, that article can be found here. It is important to note that once the NFT is tokenized or minted it can’t be deleted and the only way to remove it from circulation is by sending it to a black hole address. What Gives An NFT Value? Numerous aspects contribute to the value of an NFT but overall NFTs use the supply and demand economic model. NFT are valuable because they provide verifiable ownership. Demand (willingness to be purchased), scarcity (amount of NFTs available), additional perks (e.g. physical memorabilia), provenance (previous owners), and the ability for quick transactions to take place in the secondary market can also increase the NFTs value. Without demand there is nobody willing to purchase an item regardless of its utility (physical or digital presence). Demand for a product drives up the price - people are willing to pay enormous amounts to have verifiable ownership. If you would like to learn about the top 10 most expensive NFT purchases and what made those NFTs special, that can be found here. Aside from verifiable ownership, people also have the ability to receive the rights to the NFT; this may result in the payment of commission if the NFT is shown, for example, on live television. Additional use cases such as the ability to talk to the seller of the NFT (such as a professional NBA player) can also be received. One perk that purchasers of LaMelo Ball’s NFTs have is a random (but verifiable) chance of access to scheduled group chats with him. If you would like to learn about the dynamic NFTs LaMelo released as well as the additional perks, that article can be found here. Provenance is the history of an item and in the case of NFTs it encompasses who has previously owned the item. As NFTexplained.info previously mentioned, all transactions are recorded on the blockchain for all users to see, including previous transactions of the NFT. If a famous person were to own an NFT and then resell it, future purchasers of the item may be more inclined to pay a higher price if they could verify it was owned by a famous person (e.g. Elon Musk). Screenshot from OpenSea showing previous owners of CryptoPunk #3561 Screenshot is provided to show that all previous transactions for an NFT are recorded on the blockchain for all users to see. NFTexplained.info has created an in depth resource explaining what provenance is and how it directly correlates to NFTs, that article can be found here. We hope you are just as excited as we are about NFTs and continue to stay informed at NFTexplained.info. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!