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FinTech

Top 4 Things We Should All Know About Non-Fungible Tokens (NFTs)

 

According to Dean Sam, a non-fungible token (NFT) is a distinct and non-interchangeable component of data collected on a blockchain, a form of digital ledger. NFTs can be linked with reproducible digital files such as photos, videos, and audio.


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NFTs use a digital ledger to provide a public certificate of authenticity or proof of ownership, but do not restrict the sharing or copying of the underlying digital files. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin. In this article, we shall examine the top 4 things to know about NFTs.

  1. NFTs Are The New Collectables

Have you ever seen an art collector or are you one? NFT is a way to own art through blockchain technology. It is a way to be the sole owner of digital art and collectables. The unique token acts as a traceable digital file on the Ethereum blockchain. Let’s read what NFT artist Mike Winkelmann perceives about NFT:

‘it’s similar to when you look at or take a picture of the Mona Lisa. Having that picture doesn’t mean you own it.’

Nonetheless, you can own the expensive art of Monalisa with NFT, because of its accompanying tokens, which makes it known to everyone that you are the sole owner. With your unique token, just like an IP address, you can claim ownership of the digital art.


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  1. NFT Will Empower Digital Artists

If there is anybody that will benefit greatly from NFT, I think it is digital artists. Although, collecting digital arts is not yet mainstream, however, in the nearest future it will. NFTs will empower both the artist and the collector. Unlike what we see all around where artists lose their work to piracy, all artworks will be traced to their original creator through NFT. With NFT, creators can enjoy full royalties of their work, because their works are captured in tokens.

  1. NFT Can Be Represented In-Game Assets

NFTs can be used to generate gaming assets in digital formats, such as digital plots of land that can be controlled by the user rather than the game developer. Gaming assets such as plots of land, city, vehicles, sports cars, jerseys, boys, ammunition and so on can be sold by the game player on third party marketplaces outside the control of the game developer. It can be sold with cryptocurrency. According to Ubisoft Quartz, “an NFT initiative allows people to buy artificially scarce digital items using cryptocurrency”.

  1. NFTs Will Be The Metaverse Biggest Asset

Since NFT is all about digital assets, this will serve as a very important aspect of the metaverse. Metaverse, the latest technology, is all about the virtualization of our human existence. Binance defined metaverse as digital 3D universes that give users and businesses endless opportunities for porting real-world assets and services. In particular, the play-to-earn gaming economy will engage and empower players of blockchain games via NFTs. The truth is NFTs will be a medium for owning assets in the metaverse.

Featured Image Source: Seu Dinheiro


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Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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