We are all more connected via mobile, internet and social media than ever before. In a day, we never fail to share at least a joke, infographics, artwork, memes, or any digital asset with our friends and family.
But, have you ever imagined who was the actual creator of these assets or what it is called?
The simple answer is NFT. Yes, now let’s dive into the blog to find out everything about NFT, its characteristics, benefits, and the future surrounding it.
Basics of NFT
As everybody is talking about NFT, this is a basic beginner’s guide that will help in understanding NFTs and the reason why it is so famous these days.
What is NFT: Non-fungible token, this is a special collectible crypto asset. It prevents the content creators from unethical use of their assets in any platform without their knowledge. NFT helps creators preserve their ownership rights of their creation, and they can publish and earn returns through it.
Just like the physical collectibles like unique coins or stamps, owning a digital asset has its own set of benefits. One significant advantage of NFT is the information associated with tokens, it is easy to track a collectible and find its authenticity. Also, NFTs are not exchangeable tokens like the cryptocurrencies.
Popularity Behind NFT
There are several factors associated with the NFTs that make it popular in the marketplace.
- All information subjected to a NFT is securely stored in the Blockchain. Therefore, it is impeccable to replicate, destroy, or even remove a token.
- As it is stored in Blockchain, tracking of NFTs is easy for the owners and there is no need for any third party verification.
- The importance of NFTs is their scarcity. Though it is easy for NFT developers to create any number of tokens, it is purposefully restricted to protect the uniqueness and value of the tokens.
- Like Bitcoins you cannot divide NFTs into smaller denominations, because they are indivisible.
- NFTs are special tokens, unlike other cryptocurrencies like Bitcoin, Ethereum, and Monero they cannot be directly exchanged.
Features of Non fungible tokens
Distinctive: Just like the real-world artwork, NFTs are unique and it uses blockchain technology to stand ahead from the crowd. It also helps determine the authenticity of the NFT artwork. It is easy to identify original tokens from the replicated ones.
Infrequent: The overall number of NFT across the globe is limited and are very rare assets. Thus, the value is much higher. To be precise, the scarce the token is, the more valuable it is. The top nft tokens have more value in the marketplace.
Non-interoperable: Non fungible tokens follow the ERC-721 standard, so data associated or stored in the token cannot be used in any manner or cannot be traded by any means. You have to be aware of all these things when planning to buy nft tokens.
Unified: As the name implies, NFTs are non fungible and it is not possible to share or send a portion of the token to anybody.
Resistant: We know that blockchain manages and stores NFT, so it is more secure. Therefore it is impossible to remove or destroy by any means.
Significant Attributes of NFT
While blockchain manages NFT data, it acts as the main ledger that contains all information about the token from ownership to history of transaction. A unique id, metadata and code are stored in it, so it is impossible to duplicate the tokens.
Using appropriate tools and support it becomes easy to create NFTs. We can even include the owner’s identity to the blockchain to make it more accountable. This offers NFT with major attributes, royalty and scarcity that makes it more attractive and on-demand.
Royalty: NFTs are coded with smart contracts, software codes that takes care of owner verification and manages transferability of the tokens. We can include more functionalities and features to the NFTs similar to any software applications.
One major benefit of this contract is that, a creator can create in such a way that any sales of the NFT, the royalties are to be paid to the original owner.
Scarcity: The original owners have the right to decide the scarcity of their digital assets. The creator gets to decide the number of replicas to be made. Also, the replicas have the slightest difference in each of them. All the tokens will have a unique identity.
Benefits of NFTs
Right of Ownership: NFT is used to address extraordinary creations in both the real and digital world. We can use NTFs in gaming and collectibles in the digital world. Also, we can apply it in the real world, like craftsmanship, vehicles, personalities, or houses.
Personalization Approach: With the use of smartcontracts, all the data is held by the token itself. All additional information is incorporated into the standard options like name and ownership and extend to important data.
Safe Trading: With blockchain security and uniqueness, NFT exchange is a less complex and more effective process. It permits responsibility of ownership to transfer across multiple platforms and is even possible to operate across marketplaces or games.
NFT for Future
With all possibilities, the future of NFT looks more promising as the overall market has gained $100 million by July 2020 and the experts in the crypto industry speculate that more users will use non fungible tokens in the entry level. By looking at 40% new crypto users, and the financial market surpassing $4 billion is evident that we can expect exponential growth in the upcoming days.
We are in the early stages of NFT development and there are scope for various cutting-edge platforms based on NFT. As of now, NFT are available as digital collectibles, in gaming, in digitizing medical records and NFT artwork designers can possess ownership of their work, etc.
As it is new in the marketplace, NFT is raw and we have room for more experiments now and for the future. All new entrepreneurs and personnel looking for new opportunities or planning to venture into a new sector can enter the NFT marketplace and rule the sector. Take digitization to the next level.