Blockchain | 20 Sep 2023 | 17 min
Our online world allows us to share funny memes, cool pictures, and other interesting visuals with friends and family. Some may do it for fun, others to learn something new, or even to tell people about something important.
Have you ever paused to ponder the origin of those captivating digital assets that flood our online world? In today’s rapidly evolving tech landscape, one term has risen to prominence – NFT (Non-Fungible Token), and this is the answer to your thought.
But is it truly the shining star or just a hollow bubble of greatly exaggerated technical jargon – used by geeks, to perform pump and dump for quick cash?
What’s your opinion on this?
Allow me to be your foundation in the digital realm, illuminating the path toward NFTs through this blog. Picture them as the sleek, cutting-edge tools of the trade, powered by blockchain technology, designed to fit seamlessly into your industry’s unique landscape.
But before diving deeper, let’s get to know the origins of “NFT”.
The genesis of NFTs invariably ignites spirited discussions.
The NFT phenomenon truly took flight with the sale of Beeple’s groundbreaking artwork, “EVERYDAY”. “The First 5000 Days”, fetched an astounding $69 million and became one of the first NFT-backed pieces to grace prestigious auction houses.
However, the narrative evolved further when “The Merge,” an NFT by Park, sold for a staggering $91.8 million. What sets this apart is that ownership is collectively shared among 29,983 individuals, as “The Merge” was split into 312,686 coins distributed to buyers.
Wait a moment!
Have we unintentionally led you to believe that “NFT == Art” with the examples? If so, we might be veering off course from our main topic.
For a clearer perspective, let’s delve deeper into the concept of NFTs.
NFT means “Non-Fungible Token.” Let’s break this term down to gain a comprehensive understanding.
Non-Fungible: The term “fungible” implies that something can be readily replaced by an identical item. In contrast, “non-fungible” refers to an item that is unique and cannot be substituted with anything identical or exchanged for another.
Tokens: These are digital assets on a blockchain, representing various items like cryptocurrencies and loyalty points. It facilitates transactions and trading on exchanges. They differ from non-fungible tokens (NFTs) by being interchangeable with others of the same type and value.
So collectively, NFTs are unique tokens that cannot be substituted with other NFTs, given that each NFT possesses its distinct identity in the blockchain universe.
NFT revolves around these 4 characteristics that make them special:
Curious about how they function? Let me get you a quick summary up next on this.
NFTs operate within a blockchain, a decentralized ledger famed for enabling cryptocurrencies. NFTs digitally encapsulate both physical and conceptual entities.
Think of NFTs as the digital version of cherished collectibles. Instead of acquiring a tangible painting for your wall, you receive a digital file, coupled with exclusive ownership rights. Remarkably, NFTs are inherently unique, enabling seamless ownership validation and peer-to-peer transfers.
Furthermore, NFTs allow for customization. Artists, for instance, can embed their signatures in the metadata, authenticating their creative works in the metaverse.
Onwards to the use cases of NFT!
Here are the top 5 applications of NFT in this modern world:
Our entertainment experiences have evolved gradually. Whether it’s movies, live performances, or sports, we cherish the memories. Think back to your grandparents collecting movie posters and autographs. Now, envision converting these keepsakes into digital assets using NFTs (Non-Fungible Tokens).
Imagine attending Avicii’s concert and owning a ticket stub. Instead of storing it away, NFT creators can set its value, and attract investors. Even sell a stake in it for a profitable venture later.
NFTs revolutionize not only individuals but also the commercial scene. Consider ticket pricing for events; it often depends on seating. Now, the introduction of PFP-NFTs (Profile Picture NFTs) offers the digital NFT artists secure premium seats, while others get assigned based on rarity.
The real power of NFTs is uniting fans and collectors. You can buy NFT tickets, attend the event, and auction the NFT afterward, creating lasting connections. Plus, NFTs open events globally, eliminating counterfeit tickets and worries about loss.
So, from posters to music tracks, almost anything can become an NFT, when auctioned online.
Let’s me get you insights about the potential applications of NFTs in two vital industries.
a. NFTs in Real Estate:
Real estate transactions are often bogged down by paperwork and regulations. Imagine converting the ownership of a property into an NFT, breaking it down into tokens, and sharing it with multiple investors. This process ensures minimal bureaucracy, maximum flexibility, and swift ownership transfers.
NFTs also enable lending. You can lock your NFT in a smart contract and lend it to others. When the lending period ends, the NFT and agreed-upon currency return to your digital wallet. This eliminates human interference and ensures dispute-free agreements.
Additionally, NFTs can revolutionize banking. You can use an NFT marketplace to lend money backed by NFT collateral. The borrower locks their NFTs in an escrow account, and if they default, ownership transfers automatically. This system minimizes loan defaults and strengthens the financial system.
b. NFTs in Insurance:
Now, let’s explore NFTs in the insurance industry. Many of us have various insurance policies, from health to property. What if you could turn your insurance into an investment opportunity for others?
Consider a lady who has a flawless health insurance history. Investors could buy an NFT linked to her insurance, benefiting from her track record. This concept extends to other insurance types too, allowing investors to bet on policyholders’ trustworthiness.
To make insurance NFTs even more attractive, insurers could limit this option to young, healthy policyholders. Investors could directly engage with insurers to select profiles and agree on profit-sharing terms.
In the commercial sector, NFTs could represent insurance agreements between businesses and insurers. Attributes, like NFT properties, would define a company’s financial stability and reliability, aiding investors in making informed decisions.
This approach could support startups and small businesses while fostering trust among investors and entrepreneurs. Ultimately, it transforms the insurance process into an investment opportunity, promoting a positive outlook and calculated risk-taking.
We’re always enthusiastic about merging technology and nature, envisioning a unique use case for the energy market. Carbon trading, initiated in 1997 under the UN’s Kyoto Protocol, has evolved significantly. It’s now a crucial tool for both developed and developing economies to reduce carbon emissions.
Carbon markets assign value to emissions and facilitate the trade of carbon credits, encouraging emission reduction and efficiency improvements. For instance, entities exceeding emission standards earn credits, while those struggling can buy them to comply. These markets operate on tradable permits, where one credit equals one tonne of carbon dioxide reduction.
Creating digital wallets for participating companies enables transparent, decentralized carbon credit trading. Entities exceeding targets can tokenize their credits and distribute them to those falling short, fostering an open and global carbon market. This approach supports nations and businesses in achieving their emission reduction goals more efficiently, while also enhancing transparency and decentralization.
The exponential growth of the gaming industry, projected to reach USD 546.99 Billion by 2030, is closely entwined with the ascent of NFTs. Gamers now possess the ability to create, trade, and monetize in-game elements as NFTs, a transformative shift that enhances creativity and engagement. NFTs offer a novel perspective on in-app purchases, rendering them non-consumable assets, thereby augmenting player experience. Furthermore, blockchain-based NFT wallets enhance security and provide gamers with seamless access to their profiles across various devices.
Moreover, NFTs introduce transparency, ownership, and fresh economic prospects to the gaming realm. These blockchain tokens underpin in-game economies, allowing gamers to forge communities and engage in the trade of in-game currencies. Popular games such as Minecraft, GTA, and multiplayer shooters have enthusiastically embraced this transformative trend.
Antiques, treasures of the past, are now investments of the future. Beyond millionaires, individuals and companies seek antiques not only as art but to diversify and ensure investments. The digital era, particularly Blockchain-based NFTs, revolutionizes the antique market, addressing challenges faced by sellers and buyers.
Museums, the natural home for antiques, are vital. A groundbreaking use case emerges with NFTs, enabling global digital buying and selling. NFTs authenticate ownership, fostering trade and custody arrangements. Owners can even collaborate with museums, sharing ownership or profits, redefining the museum experience. Museums benefit by drawing crowds with digital collections.
Personally, I’m a fan of machines, especially racing cars and bikes, and analog mechanical watches. Have you ever wanted to experience these items without buying them? Well, with NFTs and similar concepts, we might just be able to do that.
So, the NFT world is still quite new, and there’s a lot of room for growth. We can expect to see many exciting NFT platforms emerge in the future.
Right now, NFTs are moving beyond their early days in things like crypto art and gaming. They’re being used more for digital identity, art, and other unique purposes. This shows that the NFT market is still developing, offering businesses a wide range of opportunities in the blockchain development services sector.
[NOTE: This open-ended use case invites discussion and collaboration, recognizing its potential to involve numerous factors beyond what’s mentioned in this document, and we’re eager to engage in dialogue and offer our expertise if deemed promising.]
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