Non-Fungible Token a.k.a. NFT has been the new buzz word in the crypto world. Till now, we have been hearing only about Bitcoins and Ethereum. A new exciting form of block-chain technology is NFT – a digital token which gives digital rights of ownership. In simple terms, NFTs are non-duplicable digital certificate of ownership for any digital asset – from sports tickets to virtual real estate and even digital art.
Simply put, NFTs open up new markets for digital and real world assets we cannot even imagine.
To understand a bit more about NFTs, let us dive into the types of tokens:
Simply put in picture, the tokens are divided as under:
FinFact: A study reveals that the NFT market grew by 299% in 2020! The NFT market quadrupled to ~ USD 250 million in 2020 from ~ USD 62 milion in 2019.
Few Emerging NFTs and its applications:
Digital Ticketing:
A ticket to a music concert or a cricket match
Defines permission of participation in an activity at a certain time and place and the rights they represent are not convertible
Will prevent fake tickets as unique identity is given to each ticket
Identity Authentication:
To identify a person through digital record of birth certificate or passport or driving license
Digital Certificates:
To store contracts, patents and other documents to the blockchain, so as to prevent counterfeiting and make them traceable
Collectibles:
CryptoKitties is a blockchain game on Ethereum
It allows players to purchase, collect, and sell virtual cats
How to buy NFTs (Popular Marketplaces):
FinFact: On 9th March 2021, an original Banksy art was burnt in a live video. The art was first converted into NFT and the NFT was sold (via Opensea) for USD 380,000! Instead of destroying the value of the art, they claim to have it made more valulable because it was sold as a piece of blockchain art!
Take-Aways:
Key Innovation: To provide a way to record ownerships of unique and indivisible assets.
Ownership: Can be kept in a blockchain (say Ethereum), making it transparent and tamper-proof.
Advantage: Storing historical ownership data on the blockchain such as digital art can be traced back to the original creator allowing pieces to be authenticated without the need for third-party verification.
May be NFT will be the next big thing in the digital world, until then, watch out this space for more articles and subscribe now!
Do write in comments section in case you would like to know about any such concept and I will try to cover in future articles.
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Loved the breadth of sub topics covered within NFTs! Such simple explanation.
Insightful explanation, though this concept still remains a bit esoteric to me ! Grateful to FinFacts for this most essential service of simplifying things !