“It feels like a sea change – the blockchain, the ledgerization [or] digitalization of all goods, the way music is distributed, books, the way art and collectibles are sold, the way season tickets can be sold.” – Gary Vaynerchuk
As we continue to mention and emphasize the gaining traction and rapid growth of blockchain technology, there’re three letters that keep popping up in the news that you’ve most likely seen somewhere recently. In areas ranging from sports, to antiques, concert tickets and to art, we’re seeing an explosion of the presence and usage of NFTs. NFTs is the acronym for the most used dAPP type on the scene today, non-fungible tokens.
So what are these NFTs? Why are they popping up all of a sudden? A non-fungible token is basically a blockchain based token which is created to represent a unique, unduplicable item in the digital realm. Ownership of these tokens is ownership of the item which it represents. They act sort of like a title for a vehicle, a receipt, or the deed to a house or a certificate of some sort: validating ownership. They can represent literally anything, as long as that thing is a singular item which can be claimed by an owner: a record set out by your favorite band, an exclusive piece of art, a concert ticket, reels to NBA games, a car, a house, a website domain, an coin… the list goes on. The only limits to NFTs are other coins, tokens or currencies; the things that are highly traded and more of a liquid asset, as well as things which are just not able to be owned or claimed by any entity. NFTs are applied to real world assets as a smart contract stating ownership of whatever asset that may be. They can’t be traded like any other crypto, as they are all unique to themselves.
It’s easy to see why these dAPPs are being used in such an increasing volume. Being built on blockchain technology, and not being able to be duplicated, much like BTC tokens, this system ensures security for both the seller and the buyer of whatever item is being transferred. The blockchain verifies the transaction amongst numerous places within the protocols, ensuring a safe and secure trade. This verification process allows for a trustless transaction, being backed by the underlying token of choice, whether the NFT is valued in BTC, ETH, DOT or whatever other token may be involved. Since they are on the blockchain, and stored on the protocol’s ledger, they are indestructible, meaning that they can never be lost (so long as you keep it safely in you possession), they cannot be removed, nor can they be replicated. NFTs bring control of assets which are normally easily duplicated, such as art, music, and event tickets back to the rightful owners, creators, producers and consumers.
As old as 2012 and even long before that in the essence of their nature, the idea and history of these NFTs has been shaping and coming to a more full fruition as time goes on. There came an idea to trade collectibles, property and other assets digitally on the blockchain. We began to see this idea come to life amongst various platforms which began to allow for the trade and creation of unique tradable treasures. Moving forward, we then saw the application of art turned into these tokens when digital artists wanted a more secure way to sell their pieces. When we look at a good lot of the games and other dAPPs in this environment today, you can clearly see the NFT application within most all of them, as they are, for the most part, focused on trading or exchanging.
NFTs have exploded into the market and it’s clear to see why: they’re secure and safe and easy for all parties with no sweat attached. The precautions we advise would be to know the value and worth of the item which the NFT represents, as well as trust in the coin and platform behind the transaction, other than that always make sure your wallet and sending/ receiving information is correct to make sure everything goes to the right place! The application for these tokens are seemingly endless as we see new creations and assets flood the market just as much, if not more than the old or already existing. This world is out there for all of us to participate and grow in, and it’s only getting bigger and more opportunistic.
Thanks for the read! Come back for more on the free market and the innovations which fuel it. We again apologize for the delay in posts: we are revamping the site, so look out for changes in the weeks to come! We appreciate any feedback, comments, or questions you may have. Thanks again!
