NFT: Non-Fungible Token, they are all different
NFT for Non-Fungible Token is an asset representation. It is a unique cryptocurrency compared to most tokens. Indeed they cannot be changed with other assets even if they are similar. For example, a dollar is a fungible token because every dollar costs one dollar. There is no history attached to it unless it is in a museum. But if it is taken out and be used to purchase anything, its value will remain to be the same. NFT bears an identity of who owns them just like other cryptocurrencies.
NFT are unique and appear on a blockchain but they cannot be cloned. Anything can be tokenized, property, people’s identity and even a tweet. Recently, the CEO of Twitter, Jack Dorsey posted a link to his first tweet that read “Just setting up my twttr” and it has people have placed bids up to $2.5m. Another feature that makes NFT stand out is extensibility where a number of NFT can be combined to form a more unique strain. Tokenization of physical and intangible assets creates a safe ground for selling assets with a low risk of fraud.
The price of one cryptocurrency like Bitcoin equals the price of another Bitcoin. This makes other cryptocurrencies fungible therefore be used in exchange, buying and selling or even exchanging the currency with another currency. These currencies are very secure and are a perfect choice for daily crypto trades and decentralized financial needs. NFT are irreplaceable, they cannot be exchanged, and neither can they be traded like other cryptocurrencies like Ethereum.
They are intermediaries
NFT are a blow to intermediaries. Creating NFT allows artists to sell art directly to clients. It also allows business people like real estate owners to sell and even reach wider markets than when they are depending on intermediaries to sell. The use of intermediaries is also a source of extra charges for transactions and broker fees increase the prices of assets.
The Non-Fungible Tokens perform on two protocols, the ERC-721 and the ERC-1155. ERC-721 is responsible for the interface which includes : security, ownership and metadata details for gaming tokens. It is worth mentioning that ERC-721 was created by the same people who created ERC-20 which is the Ethereum protocol. ERC-1155 takes the role of reducing the cost of transactions and storage also batching several non-fungible tokens into a single contract.
NFT are market efficient, they ensure that payment processes are smooth and there are no intermediaries between the seller or owner of the commodity and the buyer. This also allows the seller, for example, an artist to directly connect to the audience. The NFT representation on the blockchain allows for new market creation and discovery of new investment methods. For instance, an artist can decide to divide their art into different categories according to type and material. With the different categories, every piece is given an NFT and is unique in pricing and characteristics.
The world needs NFT. NFT are a reinvention of how cryptocurrencies work. Cryptocurrencies are the new way of decentralized payment. But their tamper-resistance added with NFT representation lead to buying and selling being simple.
Today tokenization is global and every moment can be put together and be sold.
NBA is now the most known space for NFT, moments of shooting, where Top Shots are tokenized and made into cards. These cards have been fetching millions of dollars in the market. The magic that comes with tokenization has made every moment count and every moment be worth something.
Decentraland concept is a type of NFT that has been applied on the Ethereum network which allows physical pieces of land to be tokenized according to location and value in the market. In cases of multiple owners or investors in a given product, NFT allows for the democratization of the product because sharing a digital asset is cheaper and easier compared to a physical asset. An asset having multiple owners tends to fetch higher revenue and value than a single-person owned product.
An increase in travel requires quick document processing at border points. Adoption of NFT identity allows people to cross travel with ease without the need to produce a password on every entry or exit point. This can also be a perfect way of securing digital platforms and accounts.
GIF can be sold as NFT and are sometimes worth millions of dollars !
You now are aware of this new trend and part of the future : the NFT. Share, like, comment this article!
To go further you should learn about DeFi: the Decentralized Finance.