Introduction
In this article, we want to introduce you to the NFT concept and its applications. Then we will review the essential points about it and go over the important points. Finally, we will review the advantages and disadvantages of NFTs.
What is NFT?
NFTs are non-exchangeable tokens. They are issued as a special digital certificate of ownership for any type of digital asset. In fact, NFT is a smart agreement that regulates and digitally secures using open-source platforms. After we write it, we can hold it. We can also constantly publish it as a token in a blockchain network such as Ethereum.
Some popular forms of NFTs are GIFs, JPEGs, and videos, as well as tweets. But in fact, any digital asset can be converted into NFT according to the will of its creator and designer. This is if the creator wants to have a special property: “Such as ISI articles or concert tickets that belong to one person and are unique”.
What is FUNGIBLE exchangeability?
Fungible is the ability to exchange an asset with similar assets without losing its value. NFT stands for Non-Fungible Token, which means non-exchangeable. They built this program using a system similar to digital currencies such as Bitcoin. But NFT has a fundamental difference from digital currencies. For a better understanding of this definition, refer to the following content.
Is NFT the same as digital currency?
Whether NFT is the digital currency or not. First, introduce the concept of exchangeable tokens and non-exchangeable tokens that we will explain below. Explaining these tokens will help you understand the answer to this question easily.
Why does NFT have a buyer?
NFTs can be a financial investment, an emotional purchase, a collector’s item, or a way to shop. And its purpose is to make an artist or a brand more connected to the creator of the NFT. This is similar to collecting postage stamps, old coins, or butterfly collections by people.
Sometimes the emotional reason for buying an NFT depends on a business purpose. Loyal fans may try to buy one of only a few thousand of the special model when the company’s stock drops. Likewise, if the respective company decides to drop a set of 25 NFTs. The same fans try to buy one when the price drops.
Some people believe that people tend to have a collection of things in an online space to show their brand.
Making NFT
Sometimes, the process of converting NFTs into part of the Ethereum blockchain network will take place. Then after going through some steps including selling the NFT, he will take a percentage of the amount as a fee.
The mining process is not free. And when we use some blockchains, the high fee increases as the network becomes more crowded. But with the efforts of some programmers, people can multiply their NFTs. And it acts without paying the smallest cost with methods without paying money and training to make NFTs!
Recently, many platforms have become available to us so that we can create and sell our NFT in a few minutes. And some NFT markets have even made major changes to their structure to attract more people to their market.
Are NFTs legal?
An NFT code is an asset with a digital signature from its creator. It authenticates with the help of a password on any operating system and verifies it in a decentralized way. Therefore, in this space, no organization is responsible for hosting NFT. For example, if we create an NFT for a concert ticket, It will be great.
why are people spending tens of millions of dollars on NFTs?
An NFT is an evidence in a cryptocurrency’s blockchain that indicates pieces of digital media. It was invented a few years ago and can link not only to art but also to text, videos, or bits of code. Assistants of NFTs claim that they solve a thorny problem with digital art: “how to own an original”. For makers who freely upload their work, the concept of an original is difficult to pin down. Exclusivity is impossible to induce when digital files can be shared freely on the internet. But collectors want the property that comes with having a particular claim on an artwork. This is where NFTs fit in.
Non-fungible tokens for art can seem a lot like Tulipmania. But preferable digital tokens have true use cases for things like online address management.
The current importance of NFTs
You might have heard so much about these auctions for weirdo jpegs on the internet that you’re somewhat tired of them by now. For those still in the bubbly direction of the hype cycle: “non-fungible tokens” can seem like the solution to online art monetization. For everyone else, NFTs seem mostly like a high-tech method to part a fool from his currency.
And lots of money is changing hands. One market tracker reports some $500 billion in NFT volume shuttled through top markets like Cryptopunks, Hashmasks, and Makersplace. But this is an excellent market. Most NFTs go for nothing at all, while a few supernovas go super-viral.
The future of NFTs
As their popularity increases, it is likely that we will see more ideas to expand the applications of NFTs. Due to its nature, any program for NFT applications has not had enough time to go beyond an idea. Of course, some projects may not be practical or popular.
In general, due to more fundamental issues such as copyright protection and exclusive ownership of artworks and collectibles: “NFTs seem to be useful in the future and have a long but promising way ahead”.
Applications of NFT
Non-fungible tokens (NFT) are an emerging technology with many uses. NFTs can be used to represent physical objects, digital content, or even intangible concepts such as intellectual property.
Ensuring the authenticity of products
We can use NFT to ensure that the product we are purchasing is authentic. Since the blockchain can permanently store information about the product. It will be possible to check the rarity and authenticity of a product through types of tokens.
Real estate sector
NFTs can be used to transfer land documents, provide proof of ownership, and even track property value changes over time. We can use NFTs in real estate to simplify and speed up transactions and enable smart contracts for real estate.
Storing medical records and verifying the identity
Another use of non-fungible ledger tokens is that NFTs can store people’s medical records. It is without tampering with external sources, as NFT transactions are validated on multiple nodes. And it is before being permanently added to the blockchain. For example, instead of a birth certificate, you can create an NFT and store information in it.
Protection of intellectual property and inventions
NFTs are great for protecting intellectual property. NFT tokens also allow users to prove ownership of any content. Which is not possible with traditional means such as trademarks and copyrights.
Degrees
NFTs are a good method to demonstrate scientific reliability. One can store scientific documents, educational qualifications, and other important information in NFT.
Create ID for products
It is a big issue for products, especially in the food industry, to verify where they come from, what’s in them, and so on. NFTs can be used to create an ID for products that cannot be tampered with.
Applications of NFT in the gaming industry
NFTs, give game developers another method to expand their brand and create a revenue stream. With these types of tokens, it is possible to start a system of making money in games.
NFTs also allow for easier in-game trading. NFT owners don’t have to worry about fraud because there are no middlemen involved.
Ticket purchase
In the near future, we will use NFTs as a replacement for tickets. For example, parking passes can be replaced with NFT tickets. This solves fraud problems and reduces paper consumption.
Art tracking
After World War II, many works of art were destroyed and the market for fake art became very hot. To counter this, original artworks of old masters can be tagged with NFTs for tracking.
Of course, this can be done in two methods:
1. Converted existing artwork to an NFT
2. NFTs can be turned into physical works of art
Application of NFT for voting
Most voters must carry a photo ID and proof of residency when they go to polling stations to vote. By using NFTs, digital identity can be identified for people without physical documents. This also helps a lot to eliminate voting fraud.
How to make money from NFT?
One of the most frequently asked questions these days is how can we make money from NFT? The easiest way is to publish your own work. If you are an artist, you can create your collection in online markets and start selling.
In this type of token, it is not possible to trade, extract, etc. And it is possible to earn money from this field in various following methods:
1. Investing in new projects that have high growth potential
2. Playing games that reward NFTs
3. Holding NFTs and then selling them when the time is right
4. Trading of NFTs, such as buying and selling, holding, or flipping
5. Generating royalties on multiplied NFT and having passive income from it.
How to distinguish a valid NFT from an invalid one
How distinguish a good NFT from a bad one requires some comprehensive information about the general structure of NFTs. The reason for the importance of this issue is that: “NFT tokens are considered to be the future of the digital world”. And most artists sell their works in the form of NFT tokens today.
Most users do not have enough information about this token and its uses. Because NFTs are new tokens in the cryptocurrency market and digital world. But without knowing the true nature of these tokens, they may have used them in different digital environments. The applications of these tokens are increasing always and with the expansion of other types of NFT tokens. And for this reason, users in the digital space as well as collectors should have enough information about these tokens.
Necessary points that you should pay attention to before buying NFT
When buying an NFT, we need to know various things to make sure that the purchased token is valuable. The credibility of the seller and the market in which we buy the token have an impact on it. We should also pay attention to how this project is used and in what fields it is used. Because widely used NFTs such as those used in games are in high demand.
The value of art and its creator, as well as the aesthetics of the desired work, should be considered. The future outlook of the NFT is also very effective in how distinguishing a good NFT from a bad one. Because NFTs that have a bright future will be more worth investing in.
In general, you should be careful when buying an NFT token. Otherwise, you may be deceived by profiteers who target your capital by creating worthless NFTs.
Advantages and disadvantages of investing in NFTs
Advantages
1. Anyone can invest in NFTs.
2. They guarantee the ownership of NFT by a Blockchain.
3. Learning how to invest in NFT is an opportunity to learn more about Blockchain technology.
Disadvantages
1. Contrary to popular belief, NFT is not an asset class; Rather, it is a method of registering digital ownership. Such wrong beliefs cause extreme price fluctuations in the market.
2. NFT production consumes a lot of energy.
3. With most of the NFT market volume limited to the Ethereum network, you will probably have to buy ETH.
The end word
NFT tokens, or non-fungible tokens, are tokens that use Blockchain technology to associate a unique digital asset. And it cannot be exchanged for an identical one. These tokens are spread in different industries and are related to different sectors such as games and digital goods. Although the NFT space is emerging, these tokens will be used more among people in the future.
