NFT : WHAT IS AN NFT AND WHAT ARE ITS USES?

What are NFTs? NFT stands for Non-Fungible Token. Non-Fungible means something cannot be exchanged for another item because it’s unique. For instance, one piece of art is not equal to another, both have unique properties. Fungible items are another hand can be exchanged for one another. For instance, 1 $ bitcoin is always equal to another. NFTs are token lives up in blockchain and represents ownership of unique items. Why is that helpful? Well, tracking owns a digital farm is tricky because it can be copied and distributed effortlessly. How can you prove the regional owner when everyone has an identical copy of the file? NFTs solve this problem. Imagine you made 8 pieces of digital art essentially a jpg pack for your computer, you can create or mean NFT out of it, the NFT that represents your art contains better information about it such as unique fingerprints of files, token name, and symbol. This token name is stored into the blockchain and you the artist become the owner and then you sell the token by creating a transaction on the blockchain. The blockchain makes sure that this information can never be tempted with, it also allows you to track who is the owner of the token and how much it has been sold in the past.

It’s crucial to know the outward consult is not stored within NFT or blockchain only its attributes such as fingerprints (hash), token name, and symbol and optionally link to file on IPFS. More about the fact, NFT becomes weird, that represents hard work you don’t get the physical copy of it. Most of the time everyone can download and copy for free. The NFT only represents an ownership that is recorded in blockchain so nobody can be tempered with it. Some say “NFT gives you digital ranking rights and makes it even weirder while the token owner owns the original handwork create rog NFT retains the copyrights and reproduction rights. So, an artist can sell his regional hard work as an NFT but he can still sell prints. NFTs are essentially smart contracts that lay on the blockchain. In this case, the contract stores the unique properties of the item and keeps track of current and previous owners. An NFT can even be a program to give royalties to the creator every time it exchanges hands.

There are real dangers in buying NFTs

• No law: across the globe, they protect you from getting ripped off when you buy an NFT. Before you buy the first NFT you got to do some research to determine whether or not the person who’s the mentor that NFT is authorized, has permission from the person who created the art that NFT represents.
• Selling NFT with an invisible partner: Some NFTs are preloaded with a smart contract that smart says “whenever that token is sold the prestige of sell price goes to the original creator of that NFT token”. Whenever you sell it the portion of the proceeds will go to the person who schedules to receive the payment. Be aware of smart contracts in your NFTs before you buy.
• NFT sells price fluctuates hard: If you spend any time in NFT market you can see often time NFTs are issued .125 either or 750 boxes and no one buys and beats on them and quickly values fluctuate.

Massive internet in Non-Fungible Token has led to a boom in crypto-collectible and NFT art. These are two of the most prominent use cases in the DEFI ecosystems, but they aren’t the only application scarcity and uniqueness that make non-fungible tokens a good match for real-world assets, logistics, music royalties, and more. As NFTs mature can expect to see further adoption of more experimental use cases. While the NFT ecosystems are still young, there are many interesting projects to explore, and some are already generating great value for creators and consumers.

Top 7 NFT use Cases

• Art NFT

Art NFT has helped solve long-standing problems with scarcity in digital art.

How do you keep virtual artwork rare when you can digitally copy it? While there’s fake art in the real world too, we’re usually able to authenticate them. Crypto art gets most of its value from verifying its authenticity and ownership digitally. While anyone can look at a crypto punk on the Ethereum blockchain and download or save the image, we can’t prove we own the original. For example, the anonymous digital artist Pak created a series of NFTs, each identical apart from the name. With names like The Cheap, The Expensive, and The Unsold, Pak gave each piece a different value based on the title.

• Collectible NFT

Collectible NFT whether it’s a Pancake Swap Bunny or a Finance Anniversary NFT, there’s a massive demand for digital collectibles. This use case has even hit the mainstream with the NBA NFT collectible trading cards NBA Top Shot. Along with digital NFT art, these non-fungible tokens make up a significant proportion of sales on NFT marketplaces like Open Sea, Bakery Swap, and Treasure land. There’s a lot of crossovers with crypto art, and sometimes an NFT can be both a collectible and an art piece. These two use cases are the most developed we currently have. Jack Dorsey’s first tweet is an excellent example of an NFT collectible. While a Crypto Punk is collectible and visually artistic, Dorsey’s NFT has value purely for its collectability. Dorsey sold the NFT using Valuables, a platform that tokenizes tweets. You can place an offer on any tweet. Anyone can swoop in with a counter-offer and outbid you.

• Finance NFT

Finance NFTs it’s easy to forget that not every NFT derives value from a song, picture, or collectible item. In decentralized finance (Defi), NFTs also provide unique financial benefits. Most will have some artwork too, but their value comes from their utility. For example, just liquidity offers an NFT staking model. A user can stake a pair of tokens in a pool for a certain period and receive an NFT to access the next pool. The NFT acts like an entrance ticket and is destroyed once you participate in the new pool. This model creates a secondary market for these NFTs based on the access they provide. Another example is Bakery Swap’s NFT food combos that provide increased staking rewards for holders. By contributing BAKE, you will receive an NFT combo that provides a variable amount of staking power.

• Gaming NFT

Gaming has a huge demand for unique items that are tradable and purchasable. Their rarity directly affects their price, and gamers are already familiar with the idea of valuable, digital items. Micro-transactions and in-game purchases have created a multi-billion-dollar gaming industry that could tap into NFTs and blockchain technology. It’s also an exciting area in terms of what an NFT represents. Tokens for video games combine aspects of art, collectability, and utility for players. However, when it comes to big-budget video games, NFT implementation is a long way off. In the meantime, other projects have actively built blockchain technology into their games. Gaming NFTs can be cosmetic, but many have utility too.

• Music NFT

Music NFTs like an image file or video, you can also attach the video to an NFT to create a collectible piece of music. Think of it as a digital “first edition” of a record. Attaching a song to an NFT is similar to our art example, but there are other use cases. A big issue for musicians is getting a fair share of royalties. But there are at least two possible ways to achieve a balanced outcome, blockchain-based streaming platform, and blockchain royalty tracking. Competing with Amazon Music or YouTube for streaming services is difficult for small blockchain projects. Even when a giant like Spotify purchased a blockchain royalties solution called Media Chain in 2017, there were no real benefits for artists. In the meantime, smaller projects have ended up working mainly with independent artists.

• Real-world asset NFT

Linking real-world sets with NFTs can digitize the way we prove ownership. For example, in real estate, we typically deal with physical property deeds. Creating tokenized digital assets of these deeds can move highly illiquid items onto the blockchain. When it comes to this application, we haven’t seen regulators provide much support so far. It’s still very much in development but is one to look for in the future. In April 2021, Shane Dulgeroff created an NFT representing a property for sale in California. It also has a piece of crypto art attached to the token. Anyone who wins the auction will receive the NFT and ownership of the house. However, the exact legal situation of the sale and the rights of the buyer or seller are uncertain.

• Logistic NFT

Blockchain technology can be useful in the logistic industry as well, particularly because of its immutability and transparency. These aspects ensure that supply chain data remains authentic and reliable. With food, commodities, and other perishable goods, it is important to know where they have been and for how long. An NFT also has the added benefit of representing unique items. We can use an NFT to track a product that contains metadata on its origins, journey, and warehouse.

– By: Megha Gopal Badiger