What are Non-Fungible Tokens (NFTs) and what are their applications?
The year 2021 has seen a huge surge in creating, buying, and selling non-fungible tokens, or NFTs for short. Blockchains such as Ethereum, Binance Smart Chain, Flow, and Tezos have their own standards that support the issuance of NFTs. Non-fungible tokens have played a major role in introducing celebrities, artists, and athletes to the blockchain space. As the NFT sector gains popularity, more companies are entering the space to contribute to its growth. As such, FiO, the developer of blockchain toolkits, is introducing non-fungible tokens to help grow the NFT market.
What is a Non-fungible token (NFT)?
Cryptocurrencies or tokens – Bitcoin, Ethereum, and more – are said to be fungible. This means that a unit of Ether is replaceable for another similar Ethereum unit. This is the property that makes money universal.
For example, a dollar bill in the U.S. carries the same value as a similar dollar bill in another part of the world.
Away from fungible tokens comes another kind of tokens: NFTs. Non-fungible generally means unique and can’t be replaced with anything else.
A non-fungible token is data stored on a blockchain to certify uniqueness, authenticity, and ownership. NFTs can be used to represent anything that can take digital form: photos, videos, audios, tweets, art, and more.
The blockchain is used as proof of NFT ownership, but not copyright.
There are many people that have paid millions for art or images that exist on the internet. These works are on the public domain and anyone can view or download them without restriction. So why would someone pay for it?
As has been explained before, NFTs are mainly about the proof of ownership. Buying an NFT does not erase it from the public domain, it only gives the owner bragging rights to ownership and the original artist or creator can still retain copyright rights.
What are the Applications of NFTs?
The biggest current use cases of NFTs are listed below:
Collectibles are one of the early reasons why NFTs gained prominence in 2017. Online collectibles such as CryptoKitties came into the picture and gained popularity when they caused a lot of traffic on the Ethereum network.
The Ethereum blockchain has a standard – ERC721 – used for creating NFTs. Each CryptoKitty had unique features such as eye color, fur pattern, etc. Users could purchase two different kittens and breed them.
The scarcity of the collectibles gives them their value.
The art world has existed for thousands of years and enthusiasts have paid millions of dollars to claim ownership of rare and highly revered artworks.
NFTs have revived this spirit of ownership, albeit in the digital world. Programmable art, which is more like a mix of creativity and technology, has become an interesting use case of NFTs.
Monetization of Digital Content
Apart from ownership, NFTs are about the monetization of digital content and more. For example, NBA videos can be turned into moments, turned into NFTs, and sold to fans.
This creates a way for athletes to earn money on videos of themselves in action. It also provides a good and transparent way for fans to financially support their sports heroes.
Another use of NFTs is to digitize text content and sell it to willing buyers. Twitter CEO Jack Dorsey turned the first-ever Twitter post and sold it for nearly $3 million. Not everyone can sell their tweets as NFTs for such a high figure but those with a ‘voice’ and a huge following have the potential to do so.
The NFT market is growing and its use can be extended to sports, fashion, gaming, and more.
Some people are in the blockchain industry for the technology but others are in it for investment purposes. NFTs are providing investment opportunities for people who buy non-fungible tokens at a lower price and sell them in the future at a higher price.
How Can FiO Introduce NFTs?
FiO, one of the leaders in blockchain development, is gearing towards introducing an NFT platform.
FiO.one is working on a decentralized and open distributed ledger that supports non-fungible tokens, in the same way that Ethereum’s ERC721 standard does.
This will make it easy for anyone to digitally create and own unique items and get a fair price for them.
When users mint their NFTs on the platform, the following happen:
- The newly-created NFT is confirmed on the blockchain
- An owners’ account is quickly updated to reflect the addition of new asset(s)
- The transaction is recorded and permanently stored on the blockchain
- The transaction is validated by all the nodes on the network.
FiO is ready to introduce an NFT platform that will make it easy and cost-effective to create non-fungible tokens. However before creating your first NFT, you are going to need a crypto wallet. In this article, we introduced 4 wallets to get your started.
The NFT sector is growing as celebrities, athletes, content creators, and everyone in-between is issuing and selling their own tokens. The creation of a new platform for NFT issuance is simply inevitable as existing blockchains are congested due to high network usage.
The efforts by the likes of FiO to develop a much-needed NFT platform for everyone augurs well for the future mainstream adoption of NFT and blockchain applications.