How OpenSea is Revolutionizing the Digital Asset Marketplace
Feb 12, 2021
One of the most interesting applications of blockchain technology is the ability to trade digital assets.
There’s a lot of talk about the more serious uses for decentralized technology, but there are many use cases that revolve simply around gaming and fun. Trading digital assets and items on the blockchain is one such area and is rapidly growing in popularity.
We sat down with Devin Finzer from OpenSea, a peer-to-peer trading platform for blockchain assets, to talk about how trading digital assets works, how you can get started, and what the future holds for this space.
Why the blockchain?
Blockchain technology is immutable, meaning it can’t be altered or tampered with once created. Items built on the blockchain are truly unique and original, and you can verify that fairly easily.
This allows us to create digital items and verify their authenticity, creating true scarcity and exclusivity — perfect conditions for collectible and tradable items.
Let’s illustrate this idea more with some examples from the recent past.
If you’ve heard about digital assets on the blockchain, it’s likely you’ve heard about CryptoKitties.
This was a blockchain game that first burst onto the scene in 2017. It allowed users to trade CryptoKitties — virtual cats built on the blockchain. It quickly grew in popularity, and after only a few months these virtual kittens were selling for six figures.
But this wasn’t the first example of blockchain asset trading. Before that, there was CryptoPunks, pieces of digital artwork stored on the blockchain. Each piece represented a variation on a punk character, with 10,000 pieces of art in total.
Just like the famous kittens, some CryptoPunks ended up selling for hundreds of thousands of dollars and are still being traded for high sums today.
How does this all work?
These digital items are known as NFTs — Non-Fungible Tokens. It’s not limited to artwork — it also works with things like virtual football cards and other collectible items.
And it’s not purely restricted to trading, either — you can combine two CryptoKitties to make a third, new cat, for example. This ability to play around with your digital assets after creation adds a new dimension that separates these assets from traditional, purely trading-based games.
The digital asset marketplace of the future
What does the future hold for digital assets and how we trade them? As this space continues to grow in popularity, we’re likely to see more and more applications to it. First, though, we need to overcome some barriers.
Problems with digital asset ownership
Finzer explains that the main challenges around digital ownership right now are the barriers to entry. As with crypto as a whole, people need a certain level of specialist knowledge and are required to take a number of steps (like opening a wallet) to get started.
He likens it to the early days of the internet:
“The other thing to remember is when you started using the internet way back there was all of this special stuff that you had to install on your computer to even just get on the internet. And we’re in a similar stage with blockchain — there’s all this special stuff that you have to do this black magic.”
One of the reassuring things about this, according to Finzer, is that people are still prepared to take these steps to get into the digital asset world. Artists and creators with no previous blockchain experience are taking the time to learn the ropes and jump through the hoops, and that’s a promising sign for the space.
What is OpenSea?
OpenSea is a marketplace for digital assets and NFTs. It originally existed purely for trading CryptoKitties but has quickly evolved into a more complex platform with multiple categories.
Art is a major component of the community, and the value of artwork derives from things like the creator’s reputation and past work. But there are other categories, too, like:
- Domain names — users can create domains on platforms like Unstoppable Domains, and trade these with others on OpenSea
- Virtual worlds — this is virtual real estate in game type worlds, where users can build and sell their own “land”
- Collectible items — this represents a crossover between art and gaming, where users can buy and sell collectible items like baseball cards
How to buy and sell digital assets on OpenSea
Trading digital assets on OpenSea is easy. Items are represented by tokens, and you can create your own and put it up for sale on the platform, or buy those offered by other users.
Finzer talks about the exciting possibility of tying real-world items (like bottles of wine) to crypto tokens and trading these online too, something that could gain much more traction in the years to come.
Current and planned functionality
What’s next for the world of digital asset trading?
Finzer talks about the opportunities to expand to other blockchains, not just Ethereum, allowing for cheaper transaction processing. He’s also excited about the possibility for creating NFTs more easily on OpenSea. One new feature is the Collection Manager tool, where anyone can come onto the platform, upload an asset, and immediately tokenize it to turn it into a tradable NFT.
To find out more about what OpenSea is doing, check out their website here. And to learn more about Unstoppable Domains and what we’re doing in the virtual real estate space, as well as exciting conversations on all things decentralization, check out The Unstoppable Podcast.