For mining and trading NFTs, Ethereum has been the preferred blockchain. The situation is changing quickly, however, as the high gas fees on Ethereum are forcing many participants off, making NFTs on other chains more appealing.
Here, the Bitcoin blockchain can also be very useful.
What are the chances of that happening? Ethereum and other networks use smart contracts to operate NFTs, DeFi protocols, and decentralized apps, but Bitcoin has no smart contract capabilities. On a native level, anyway.
Even though NFTs “on Bitcoin” do not exist purely on the Bitcoin blockchain (like ERC721 tokens exist on Ethereum), they are secured by the Bitcoin blockchain. It is provided by the likes of Stacks that enables the issuance and security of NFTs with Bitcoin.
Stacks is a blockchain that can run smart contracts and aggregates all of its transactions into Bitcoin transactions at the end. Although it’s a layer-1 blockchain, its scaling mechanism is similar to Ethereum’s.
While Stacks allows DeFi protocols based on Bitcoin to be run on Ethereum, its smart contract capabilities can also enable NFTs backed by the security and liquidity of the Bitcoin network.
The transactions are faster, cheaper, and more energy-efficient because Stacks performs most of the work away from the Bitcoin mainnet.
One such marketplace is Redeeem NFT. Rare luxury items were available on the site, including handbags, wallets, shoes, and collectible art pieces.
Items that have been verified are backed by NFTs and are stored in vaults. The NFT is combined with tokens that denote ownership of the physical items. The tokens can be redeemed anytime for the physical items.
Kyle Hill, President, Head of Crypto, Troika IO, said that our NFTs are backed by the physical world. Due to the familiarity of Bitcoin, integrating with Stacks has contributed to accelerating adoption and interest from the mainstream market.
Stacks Network (STX) is used to settle Bitcoin transactions on the blockchain. Clarity smart contracts are used to associate the location, origin, and authentication of the physical object.
It might seem unusual to put NFTs on Bitcoin, but that advantage could prove significant.. Due to its dominant market valuation, Bitcoin’s most ardent supporters are often maximalists, shunning all other crypto assets and their networks as a result..
It might help these NFTs stand out in a market that is getting increasingly crowded when paired with Stacks’ scalable technology.