NFT's and their Applications

How does NFTs Work?

An NFT basically creates a blockchain-based digital certificate for your digital collectibles, including games, music, art, and many more. This certificate gives your artwork a unique identity. The underlying technology and the programming language used by NFTs are the same as those of other cryptocurrencies, such as blockchain and the programming language ethash or scrypt. NFTs majorly exists on Ethereum blockchain, a distributed public ledger that records all  the transactions. However, NFT is quite different from these cryptocurrencies. Bitcoin and Ethereum are fungible tokens, which means if you trade bitcoin or Ethereum for one another, you will have the same value or item in return, basically money. On the other hand, NFT is a unique token, so if you try to trade it, you may end up with something completely different in your hands. Cryptopunks is a remarkable example of NFT. It enables you to buy, sell, and store 10,000 collectibles with the proof of ownership being stored on the Ethereum blockchain.

Thus, when you buy NFTs for all your paintings, your artwork is secured from any kind of forgery and gives your artwork a particular value. This contributes to increasing sales too, as everyone can easily buy the artwork without any fear.

Similarly, NFT has proved itself to be a boon in the lives of many others, like Jack Dorsey, the CEO and Co-founder of Twitter, with his very first and famous tweet — “Just setting up my twttr” — and Vignesh Sandarsen — famously known as ‘Metakovan’, who bought 69.3 million dollars’ worth of NFT art on Beeple. Owing to its increasing popularity, people are now willing to pay hundreds of thousands of dollars for NFTs. NFTs have enhanced media exposure and special perks for aspiring artists on social media. This popularity of NFT creates new opportunities for new art platforms, motivating people to buy art from internet platforms and promoting copyright or originality of digital assets.

Many experts in the crypto industry say that around 40% of new crypto users will use NFTs as their entry point. As a result of its growing popularity, NFT could represent a more significant part of the digital economy in the future.

Should You Buy NFT’s?

Is it true that just because you can buy NFTs, you should? NFTs are risky because their future is uncertain, and we don’t yet have a lot of history to judge their performance. Since NFTs are new, it may be worth investing small amounts to try it out for now.

In other words, investing in NFTs is a largely personal decision. If you have money to spare, it may be worth considering, especially if a piece holds meaning for you.

However, keep in mind that the value of an NFT is solely determined by what someone else is prepared to pay for it. As a result, demand will drive the price rather than fundamental, technical, or economic factors, which typically impact stock prices and, at the very least, form the basis of the stock market.

Some other applications of NFT

Event tickets — Rather than selling tickets, event organisers will sell NFTs. The customer can resell them if they like, and organisers can be assured that their NFT will not be counterfeited.

Legal documents, invoices, signatures, and so on – Any legal property document can be converted into an NFT. It can aid in determining who the true owner is. This will eliminate real estate scams and make the selling process easier. Furthermore, it will reduce the need for middlemen (local administration). As a result, both the seller and the buyer will benefit from a low-cost and speedy transfer. Similarly, invoices and signatures can be tokenized. It will put an end to misappropriation and keep a permanent record of every transaction.

The use of NFTs in supply chain management can provide evidence of a product’s originality. For example, you may verify the legitimacy of any medicine by tracking it back to its original manufacturer.

To ensure fair usage, anything unusual can be transformed into a non-fungible token. To prevent forgery, your college diploma, driver’s license, personal ID, passport, and other documents can, for example, be issued as an NFT.

NFTs can also be used for branded goods. It aids in the identification of genuine items and puts an end to counterfeiting.

Conclusion

As you can see, NFTs already offer new opportunities, especially for creators, to market their content through digital ecosystems and also to participate in secondary trade in the long term. Participants in an ecosystem can rely on the integrity and uniqueness of NFTs for a hedge against economic exploitation without having to tie themselves to a centralized intermediary or marketplace operator. Apart from art, these principles can be applied to almost all industries that do business with real and digital goods.