- NFTs are unique and follow ERC – 721 token standards.
- They have a variety of uses from registering the ownership on blockchain to monetizing it.
Non-Fungible Token
In today’s world when technology is advancing day by day. A new way has emerged of registering the ownership of digital art. Now a user can register the ownership of any non-fungible thing they make on blockchain and even get royalty for it. This is possible only with the help of NFTs. They can not represent not only digital art but also real world art items like paintings and even real estate.
The main reason why the NFT market is in boom nowadays is because tokenizing the real world items not only makes buying, selling and trading more efficient but also reduces the chances of fraud as the ownership of every items are registered on the blockchain which cannot be changed once registered because of the high security feature of blockchain.
What are NFTs?
NFT stands for non fungible tokens Non-fungible means which cannot be replicated. Hence NFTs are art pieces which cannot be replicated easily because the ownership of them is registered on the blockchain. If anyone owns a NFT then only they can sell or trade the asset since the ownership is registered with their name.
NFTs can be traded and exchanged not only for money but also for real world digital assets. Some people are ready to pay millions for each NFT. For example in March 2021, a digital artist beeple sold his group of NFTs for $69 Million. The art was basically a collage of the artist’s first 5,000 days of work.
How Do NFTs Work?
NFTs are issued through a process called the minting. In the process of minting the information of a NFT is registered on the blockchain. Its information is further validated by its validators to ensure its security of the assets. In the process of minting smart contracts are entailed in the digital asset. This process adds code to the blockchain regarding the ownership and transferability of the asset.
NFTs work on the ERC – 721 token standards.
What are the Use Cases of NFTs?
NFTs will be used in a variety of ways in the future. Some of them are listed below.
- For Displaying in museums
The concept of metaverse has already started taking its shape. Many companies are investing in metaverse in large amounts. For example companies such as meta are investing billions in building it. Some organisations have even builded the metaverse. Decentraland is one such example. It has its own metaverse. Further in the future many users will start using this metaverse. In these metaverse there will be museums in which these art will be displayed.
- Investing
NFT are a very potential source of investing. All users need is to identify the real potential in the art. If it is unique and its concept is good then these art pieces are expected to sell in millions. For example – The Merge NFT was sold for US$91.8 Million, another popular NFT called the block by Julian Assange was sold worth $52.7 Million. Hence truely unique NFTs are a potential source of investment.
- Opportunity For Artists
NFTs have opened a new world of opportunities for not only content creators but also art lovers. Earlier creators faced a huge problem of their art being stolen by others and didn’t get the true value of their efforts. But NFTs have changed this. It has provided them the opportunity to register their art on blockchain and even earn incentive with it.
