Meanwhile, an upcoming addition to Stacks' NFT ecosystem is Satoshibles, a collection of NFT avatars that currently lives on Ethereum, although it is based on the pseudonym of Bitcoin creator Satoshi Nakamoto. While Bitcoin was hailed as the digital answer to currency, NFTs are now touted as the digital answer to collectibles, but many sceptics fear they are a bubble waiting to burst. NFTs function like cryptographic tokens, but unlike cryptocurrencies such as Bitcoin, NFTs are not interchangeable with each other, so they are not fungible. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies such as Bitcoin.
Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, for example, an ETH coin. Just as Stacks can enable Bitcoin-based DeFi protocols without wrapping BTC for use on Ethereum, its smart contract capabilities can also power NFTs backed by the security and liquidity of the Bitcoin network. The concept of Bitcoin-backed NFTs is not entirely new, but the framing is and the market has changed and matured considerably. They are not fungible, which means that you cannot exchange one NFT for another as you can with bitcoin and other cryptocurrencies.
While all bitcoins are the same, each NFT can represent a different underlying asset and therefore have a different value. So why do people spend so much money on NFTs? By creating an NFT, creators can verify the scarcity and authenticity of almost anything digital, says Solo Ceesay, co-founder and COO of Calaxy. Years ago, before anyone knew what an "NFT" was, visual assets were tokenised and shared via Counterparty, a protocol built on top of Bitcoin. Brittany Laughlin, executive director of the Stacks Foundation, told Decrypt that she "has seen an increase in NFTs created on the platform lately, with creators saying they "want to link it to the Bitcoin blockchain." According to the Stacks dashboard, which only collects a handful of total projects, the most traded NFT collection of the past 24 hours is Bitcoin Birds, which has had 16,651 STX traded in the past 24 hours.
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