Whats an NFT & how is it going to change the world?
You keep hearing NFT this, NFT that… So whats an NFT?
Non-fungible tokens (NFTs) are unique digital assets that are stored & transferred using blockchain technology.
💬 Whats a blockchain?
A blockchain is a decentralized database that consists of a series of interconnected blocks, each of which contains a record of multiple transactions. Because the blockchain is decentralized & distributed across a network of computers, it is resistant to tampering & provides a secure way to verify and transfer ownership of assets.
So back to NFTs…
NFTs are called non-fungible because they cannot be exchanged for another NFT or for a specific value, like a traditional currency. This is in contrast to fungible assets, which are interchangeable & can be traded for an equivalent value, such as a dollar bill or a gallon of gasoline. For example, if you have a dollar bill & I have a dollar bill, we can exchange them and both still have the same value. However, if you own an NFT of a digital artwork & I own an NFT of a different digital artwork, we cannot simply exchange them because they are unique & have different values.
NFTs can be used to represent a wide range of assets, including but not limited to:
- Crypto art: Digital artwork that is created & sold as an NFT
- Virtual lands: Virtual real estate that is owned & traded as an NFT
- Digital trading cards: Collectible cards that are created & sold as an NFT
- Documents: Physical documents like ID cards, vaccination records, & electronic prescriptions can be stored & verified on a blockchain using NFTs
Where did NFTs start?
The concept of NFTs was first introduced in 2012 as “Coloured Coins” by Meni Rosenfeld, which were intended to represent and manage real-world assets on the Bitcoin blockchain. However, it was not until the introduction of the Ethereum blockchain & the ERC-721 standard that NFTs gained widespread recognition.
Ethereum is a decentralized global software platform that uses blockchain technology to enable the creation of smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The ERC-721 standard is a specific type of smart contract that promotes the distribution of NFTs on the Ethereum blockchain.
Whats next for NFTs?
Since their inception, NFTs have seen increasing adoption in the gaming & metaverse industries, & are beginning to be used in the music industry through platforms like Verse.audio.
NFTs provide a new way for creators to monetize their digital assets & for collectors to own unique, one-of-a-kind items. However, like any new technology, there are still questions & concerns surrounding the long-term viability & sustainability of NFTs. Some critics argue that NFTs contribute to the commodification of art & the further concentration of wealth, while others highlight the environmental impact of the energy-intensive process of creating & trading NFTs on the blockchain.
Whats my prediction?
It is difficult to predict exactly what will happen in the future of NFTs, as the technology is still relatively new & constantly evolving. However, there are a few trends & developments that may shape the future of NFTs:
- Continued growth: The market for NFTs has seen significant growth in recent years, & it is likely that this trend will continue as more people become aware of and interested in NFTs.
- Greater mainstream adoption: NFTs have already gained some mainstream attention, but they have yet to be widely adopted by the general public. It is possible that this will change in the future, as more people become familiar with NFTs and their potential uses.
- Increased regulation: As the market for NFTs grows, it is likely that there will be greater regulatory oversight to ensure that NFTs are used ethically & responsibly.
- Greater interoperability: Currently, different NFT platforms operate on their own separate blockchains. In the future, it is possible that there will be greater interoperability between these platforms, allowing NFTs to be more easily transferred and used across different platforms.
Do you own an NFT? Let us know in the comments below!
Zein Zaioud — Reshaping music streaming
Founder @ Verse.audio
