What are Digital Collectibles ?

 

If you’re curious about digital collectibles and their place in the web3 space, this guide is a good place to start. For the purpose of this guide, we will refer to non-fungible tokens (NFTs) as digital collectibles.

What are digital collectibles?

Non-fungible tokens (NFTs) are rare and unique blockchain digital collectibles with blockchain-managed ownership. Simply put, blockchain is crypto technology that creates unique, verifiable ownership records for everything. This ranges from:

• virtual real estate,
• music,
• art,
• event tickets,
• game items,
• domain names, and
• ownership records for physical items such as toys

On the other hand, fungible items can be replaced by something identical to them. Take, for example, a one-pound note. The serial numbers on a one-pound note may be different from those on another note, but the ability to replace one with the other makes them fungible items. However, it’s worth pointing out that fungibility is relative, depending on who you’re asking. A car salesman might think a 30-year-old car isn’t worth much, but a vintage car collector might think it’s worth a lot more.

How Do Digital Collectibles Work ?

Blockchain technology forms the foundation that underpins Digital Collectibles. These blockchain Digital Collectibles are stored in a secure, transparent public ledger or record that maintains an audit trail of digital transactions (smart contracts) encoded directly into the system. This technology uses cryptographic techniques, ensuring the immutability of the NFT (Non-Fungible Token) or Digital Collectible. Only authorized parties possess the ability to verify these transactions. Unlike traditional databases stored on a central server, the blockchain is decentralized, eliminating any potential single points of failure or susceptibility to hacking attempts. Anyone can validate the history of ownership for a Digital Collectible, enhancing their understanding of its authenticity, uniqueness, and value. In a nutshell, all digital transactions are both verifiable and tamper-proof, and establishes trust and authenticity for Digital Collectibles holders. Take for example a deck of digital trading cards. Imagine they are truly one-of-a-kind, featuring distinctive colors and unique attributes. How would you demonstrate your ownership to others? With a Digital Collectible, you receive a digital certificate confirming, “This Digital Collectible Card belongs to [Your Name].” This certificate holds significance because of its intricate computer code that can’t be replicated or forged. A certificate of authenticity signifies not only your ownership but also the item’s value.

It all began in 2017 with the surge in high-profile auctions selling unique collectibles for millions of pounds. Each digital collectible holds its own value determined by buyer demand. Since then, it’s been an exhilarating time for collectors, who not only treasure their favourite digital collectibles but also for artists, athletes, and musicians. Third parties and intermediaries, such as music record labels, are no longer involved, ensuring artists receive direct profits from their digital collectibles.

What’s the Difference Between a JPEG and a Digital Collectible?

While a JPEG can be copied and duplicated an infinite number of times without retaining any trace of ownership, the advent of Non-Fungible Tokens (NFTs) has revolutionized this landscape. In contrast to JPEGs, NFTs offer immutable ownership and authenticity.

When a JPEG is copied, it loses its connection to the original creator and can circulate endlessly across the internet without any record of its origin. However, a Digital Collectible, represented as an NFT, cannot be duplicated or tampered with due to its unique cryptographic signature stored on the blockchain.

Digital collectibles, such as those offered by CryptoKaiju, are securely stored on the blockchain, ensuring verifiable authenticity and traceability. Each CryptoKaiju creature, represented by an NFT, carries information about its original owner, creation details, and transaction history. This inherent transparency and irreplaceability make NFTs a revolutionary advancement in digital ownership.

Digital Collectibles & Traditional Ownership

There’s a vast difference between traditional ownership and Digital Collectibles. Even though they are not physically present like traditional collector items, Digital Collectibles have revolutionized the way we engage with collectors and collector’s items. Leveraging blockchain’s decentralized ledger, along with their scarcity, value, and exclusivity, they are accessible from anywhere in the world. The inclusive nature of the Digital Collectible ecosystem opens a new demographic of enthusiasts who weren’t able to take part in traditional collectible markets in the past. This opens more doors to various types of collectors from different countries and interests, encouraging more users to connect and collaborate.

Benefits of Digital Collectibles

Digital Collectibles empower creators and artists to sell their work directly to their fans, regaining control over their creative work. This gives them the ability to decide the value of their work and benefit 100% from the sales. They are liberated from the traditional artists’ and musicians’ economy where a third party would be involved and take a cut. Additionally, they can build a closer relationship with their fans by offering exclusive perks. This not only fosters transparency between artists and fans but also revolutionizes the artists’ economy, respecting the rights of artists.

But, it’s not enough that a Digital Collectible is scarce and rare. It becomes more valuable once we understand its scarcity and what we can use it for. That’s it — its utility. How easily can the Digital Collectible be used, and what perks does it give to its owners? eBay has introduced an exciting collect and reward programme, incentivizing long-term collectors to continue trading on the platform. The points give them access to a range of benefits, including rewards towards rarer items and exclusive experiences.

Collectors can also recognize the investment opportunities of Digital Collectibles. As the market matures, sought-after Digital Collectibles appreciate in value, just like rare physical items do. By purchasing them at a lower price and selling them in a secondary market, collectors can experience significant gains.

Conclusion

The Digital Collectible ecosystem provides collectors and fans the tools to persist with their passion(s) and claim digital ownership of truly valuable items. Not only do Digital Collectibles boast strong security and transparency measures, but their rarity also presents investment rewards and exclusive loyalty points for their owners. Not to mention the freedom and control that artists and musicians gain over the sale of their work.

As technology advances, our interaction with Digital Collectibles will evolve. With the integration of augmented reality (AR), virtual reality (VR), and artificial intelligence (AI), an interactive and immersive experience awaits collectors. The ecosystem will only become more intriguing, so we encourage you to continue exploring the captivating world of Digital Collectibles.