The Word NFT- The Non-Fungible Token must have constantly been ringing around you since last year. Last Year- 2021, marked the Year of the NFT boom and NFT is the world of the Year according to Collin’s dictionary. Being the hottest trend, you must be hearing this word over and over again. Either your fav star should have released an NFT collection, or your peers must have bought one. So the word NFT is not to you. Even if it is, you should have wondered what this is all about. You hear people buying them from NFT trading Platforms, making money. You hear a lame red pixel selling out for 900k dollars. And don’t take me to the list of expensive NFTs. Enough is enough; let me tell you what an NFT is.
A Non-Fungible Token is something that is minted on the Blockchain, same as cryptocurrencies, except for the fact that NFTs are non-fungible or non-interchangeable while Cryptocurrencies are fungible. In other words, it is a unique token that helps you to represent a unique digital asset on the Blockchain. Owning an NFT is, holding the copyright of NFT on the Blockchain. This can never be modified or deleted.
Why are NFTs popular?
So, they are something in the Blockchain that helps one to own unique digital files. That’s good because this is a new concept and also a strong concept where the data cannot be tampered with, deleted, or destroyed. Apart from this, why are they popular?
- They are unique, and they give definite ownership of unique digital assets.
- They are the new trend that is expected to get adopted by the masses.
- Every industry that needs uniqueness is taking up NFTs to mark its uniqueness.
- Decentralization is something that is taking over the world. With Blockchain and web 3.0, NFTs are getting all the attention.
- Metaverse and the whole new experience of social interaction are also one of the reasons why NFTs will stay in the game for a long time.
Solving Plagiarism and Duplication
The artist community was the first to take up the Non Fungible tokens for representing their digital art. Two things in NFTs attracted the whole art world to take them up.
One is the copyright ownership they get for the digital files, which are unmodifiable. Once you are recorded as a creator of the NFT, you forever are the creator though the owners might change when you sell them.
Second is the royalty the creator gets every time the NFT is sold in the secondary market.
Since NFTs are unique in the Blockchain and cannot be tampered with, they are the means to avoid plagiarism and duplication of original creations. Because of this unique property, NFTs are even used in birth certificates today. With this as a start, we can expect NFTs to get adopted by the masses soon in the future. NFTs can be used in various fields, including medical records, certifications, and documentation.
A promising world for Gaming
Another NFT mass adoption in progress started with the Gaming industry. Instead of pay-to-play games, play-to-earn games are getting popular among the gaming community today. In play-to-earn games, the in-game items like the characters, weapons, accessories, clothes, and more are made into NFTs. In this way, the gamers can buy and sell these items on an NFT trading platform and make sure they never lose the money they spent.
Unlike the existing pay-to-play games, the in-game items have definite ownership of them on the Blockchain. The NFTs mark their own, and hence they have all the rights to decide on what to do with that item. In traditional games, the items are only visible on the player’s gaming account and have no use cases except for using them in the game.
NFT gaming items can be used for playing anytime,
- list them on the NFT gaming marketplace to sell them off,
- auction them off to other players,
- play with them continuously to improve their strength, or
- rent them to fellow players when not in use.
This has empowered professional gamers as well as recreational gamers to get into these platforms to earn a passive income. While digital art contributed its part to familiarizing NFTs and Blockchain, NFT games took a role in popularizing them globally. With the Web 3.0 model, these games will go in history for making people aware of the new technology that is getting ready to take over the world.
2022 and Beyond
It is a misconception that NFT is a Bubble. People thought NFTs weren’t worth enough to get this much value and popularity. They said NFT s would go down anytime since its boom, and they are just overhyped.
When the first quarter of 2022, after the NFT boom in 2021, saw a small decline in NFT sales, people commented that NFTs were dead and its time for its decline. But surprisingly, even during the crypto crash, the sales were upright. The first quarter of 2022 saw a sales volume of $12.4 billion, which is the all-time high in NFT history. The last quarter of 2021 recorded a whopping $10.7 billion. This states that the demand for NFTs is still high, and people are into this new concept of owning everything digital on the Blockchain.
The number of daily active wallets was seen the most in popular NFT marketplace platforms proving NFTs are unshakable.
Operational difficulties of Blockchain like Ethereum are getting an upgrade to make them a better network for the future. With other emerging technologies like Metaverse taking up Blockchain and NFTs as a supporting pillar of the tech, the future of NFTs will get more interesting and exciting for the users. NFT trading platforms will emerge as e-commerce platforms we use daily. Everything from booking tickets to buying groceries can take up NFTs in the future.