Let’s Talk About NFTs

In October 2021, Beeple’s NFT was acquired for about $69 million. If you are hearing about NFT for the first time, this type of news can make you curious. Sadly, it is easier to buy the misconceptions about NFTs than the truth.

Some of the common things people say about NFTs include “they are just JPEGS” or “they don’t have real-world value.” However, NFTs are more than that. When you understand the concept and the technology behind it, you tend to see the bigger picture and how NFTs can impact many sectors.

So, let’s talk about it.

What Are NFTs?

NFTs stands for Non-fungible Tokens.

When they say a token is non-fungible, it means the token is unique and cannot be duplicated. Imagine your iPhone and your friend’s iPhone. Although they are the same phone, you wouldn’t exchange them, they are not fungible as they hold a specific identity.

For instance, cryptocurrencies are fungible. It doesn’t matter which specific Bitcoin you send or receive, they are all the same. The same applies to a dollar bill, it doesn’t matter which one you have, they are all fungible.

However, Non-fungible tokens are unique, special, and have only one copy.

Too often people think of NFTs as only digital art, however, they are much more than that. Many things other than drawings can be handled by this technology. In general, NFTs can be any type of digital asset and they usually have a unique owner.

Art NFTs are sold or treated the same way someone would treat a copy of special artwork. Take the Mona Lisa painting as an example. It has only one original copy available at the Louvre Museum in France. It doesn’t matter if anyone takes the pictures or draws another one that looks similar. The original copy is where it is.

However, NFT can be a little confusing for beginners because they are digital, and unlike the Mona Lisa painting, there isn’t an offline copy anywhere.

So, as a beginner, you might ask one important question:

Are they special (or Non-fungible) if I can take a screenshot of the digital art? That’s a good question. And that brings us to some things you should know.

Some Fallacies And Misconceptions About NFTs

It’s okay to be curious about something you don’t understand. So, in this section, we will explain what NFTs are and what they aren’t.

NFTs are digital assets or crypto-assets that are supported on the blockchain. A blockchain is a technology that stores data in decentralised ledgers called blocks. Once a transaction is conducted on the blockchain, it becomes stored, irreversible, secure, and open.

So that explains why NFTs are unique. When a person owns an NFT, the record is stored on the blockchain that they are the rightful owner. Therefore, it doesn’t matter if someone else takes a screenshot of the artwork. The transactional details that prove ownership of the NFT are already on the blockchain and cannot be changed.

Here are some of the misconceptions:

• NFT is a type of cryptocurrency

No, they are not cryptocurrency. They are unique digital assets like music, arts, videos, etc., and of course, they’re supported on the blockchain like cryptocurrency.

• Someone can own an NFT by taking screenshots or pictures of NFTs

No, the concept is based on ownership, not having a copy. By taking the photo of someone’s NFT, you will have a copy of the image, not the right to sell or transact with it. The real owner has information on the blockchain that says the NFT belongs to them and them alone.

• NFTs are worthless and have no utility

(Often referring to “Art” NFTs) — No NFTs aren’t worthless. Just like the value of a painting, which is based on the historical relevance and the story of the painting. Similarly, NFTs will increasingly gain relevance in the digital world, and having a copy of the first NFT ever created will be a valuable piece of history. The market is still growing, and investors are expanding how to make things easy for everyone.

• NFTs creators and traders are scammers

The NFT market is an avenue to make money off digital assets. So when an opportunity like that arises, people want to take advantage of it, either the right way or the wrong way. As there are legitimate arts sellers, there are also scammers and perpetrators of get-rich-quick schemes. Surely, this fact doesn’t make the whole NFT market a scam.

• NFTs are difficult to understand

Most new technologies are difficult to understand. However, with time and curiosity, things get easier. So for those who think NFTs are complicated, start by keeping aside what you believe the concept of buying and selling of art should be. Then, be open to this new trend. Luckily, this article has put you on the right track to understand the concept better.

What Are The Use Cases Of NFTs?

Mike Winkelmann is one of the people who has had the biggest sales in NFT. One of Mike’s NFTs, Beeple, has made him $69 million richer.

This story is an example of how digital art creators, lovers, and auction houses are making money from NFTs, but that’s not all.

These are 5 of the use cases of NFTs:

• Verifying the authenticity of products

With the concept of NFT, people can verify the authenticity of a product. Remember that NFT works on the blockchain and that the transactional details are stored, secured, and irreversible. It means NFT can be used as a trustable medium to confirm the details and originality of an asset. It can be used to track the manufacturing process of consumer products or check the authenticity of medical products and digital arts.

• Transacting in real estate

Instead of using the paper and pen type of documents used in traditional real estate contracts, how about using NFTs? They are non-fungible tokens, making them unique and showing that ownership belongs to a person. Therefore, the concept can be used to

• Transfer land deeds
• Monitor how the property has changed or moved from one owner to another
• Create (smart) contracts.
• Keeping medical records

NFTs can be used to store and secure information about a person’s medical records over time. It can be used to solve the issue of data transparency which is common in clinical research. The blockchain, the technology behind most NFTs, will ensure that medical data is protected from third parties.

Also, the data or activities on the blockchain are irreversible. It means if the information is stored accurately, the details will be accurate and can be accessed forever.

• Declaring the real owner of intellectual properties

NFTs can be used as proof of ownership for creators of intellectual property such as digital artists, authors, musicians, video creators, and more. NFTs can contain the verifiable originality and the history of a property.

• Creating academic credentials

How do you keep track of how a person gets certain credentials? How do you create immutable or irreversible details of class attendance, grades, skills, lessons, projects executed, or courses completed? If you answer NFT, then you’re on point.

NFTs can be used in representing academic credentials. Every detail will be stored and processed on the blockchain. Once the owner is qualified to hold certain credentials, the ownership of the NFT will be transferred to them. As a result, the person will have their credentials immutable, secured and permanent.

Conclusion

NFTs are more than just digital arts. You can use them as channels to prove or verify the ownership or authenticity of many things. The concept isn’t difficult to grasp if you start with what it means when something is “Non-fungible.” Additionally, NFTs have more than one use case. They will become easier to use when they become mainstream.