Non Fungible Tokens (NFTs): What’s under the Hood?
You’re mostly wrong if you think non-fungible tokens are about weird looking images or GIFs.
You have been living under a rock if you haven’t heard the word NFT these days. The crypto industry is screaming non-fungible tokens from the rooftops. Big-name artists are selling NFTs for millions of dollars apiece.
But not just art, non-fungible tokens (NFTs) have countless applications. They are here to make things more transparent and permanent.
What are NFTs?
Simply put, they are just tokens attached to real world things. And they are non-fungible. That means each one of them is unique. In addition, they are held on Blockchain. So, they are safe and immutable.
Technically, each NFT has some metadata attached to it. Generally, it includes information about the original creator and the present owner. And with blockchain technology, foul play is just a dream.
So, you can convert your invaluable piece of art into an NFT. And nobody can change that–ever. According to your terms, you will earn fair royalties with each resale.
But what makes NFTs a million dollar thing?
That’s the exact question I asked myself when I came to know that a Cryptokitty got sold for USD 172,000. There she is:
While the owner paid a fortune, I was busy downloading that image with a right-click.
And I wouldn’t be jailed for that.
Bollocks! No, that’s true.
The thing with NFTs is, only the original holds the value. The copies aren’t worth a dime. Just like the original painting of Monalisa by Leonardo da Vinci is irreplaceable and the duplicates are practically worthless.
The same goes for each NFT. But yes, you have to be a top-notch artist to command that type of a paycheck.
What else can NFTs do?
You probably aren’t an artist, and neither am I. So, why are we discussing this fancy on this busy day?
Because, as I already told you, non-fungible tokens are much more than just a piece selling in millions. They can change many things for good, for everyone. Let’s take a look.
Each branded item can be assigned an NFT. So, you would be assured while spending your hard-earned money on one. You can easily check who is the original manufacturer of your brand new merchandise.
While duplicate merchandise can only fool your pocket, counterfeit medicines put your health in the line. For instance, there isn’t an easy way to tell that the COVID shot you got was an original. NFTs have the power to put these doubts to rest for good. So, each vaccine can be traced back to its drugmaker.
This is one of the most opaque markets. You can never know about the legitimacy of your investment. Additionally, each purchase comes with an annoying list of formalities and legal charges. NFTs cut the middlemen. Besides, they make the process tamperproof. You can check the sales history of any piece of real estate.
Fake ID cards will be a thing of the past if governments adopt NFTs. Similar to the previous examples, NFTs put a full stop to the forgery of important documents, such as a passport. It has substantial benefits in preventing human trafficking, identity fraud, etc.
If NFT’s are that good, what’s stopping us?
Inertia and finances. Well first, it’s not simple to convince governments to radically change their working procedures. And second, a transfer to a nascent technology has some doubts and costs attached to it.
Regardless, this technology is getting mature by the day. Developers all around the world are trying to make the transfer to the blockchain easy and economic. Let’s hope for the best.
Hey there! I'm Hitesh, founder of this blog. Currently, I also work as a senior writer at Geekflare to 'keep the lights on.' I'm committed to keep it real and help you people make the right buying decisions. I hope we'll see Mustechie grow into something substantial--a place you can trust without any second thoughts. See you again, soon!