How NFT Is Changing The World
How NFT Is Changing The World
Imagine buying a pair of shoes online from Nike. The store will deliver any piece of the same size and price you ordered from among the thousands of identical pieces they manufactured. This type of product is called “fungible product” aka “replaceable product”. Now, imagine buying a sack of rice from a department store. The shopkeeper would pick up a random sack for you from the many sacks available. This is yet another example of a fungible product.
The Non- Fungible Tokens, on the other hand, as the name suggests, are the exact opposite. NFTs are non-replaceable items and are unique in themselves, like Bitcoins and Dogecoins.
NFTs can be defined as “a database record on the blockchain that refers to a unique specific digital asset” or “a data added to a file that generates a unique signature”. A token is “a unit of currency on the blockchain.”
In simpler terms, NFTs are anything digital that is downloaded, for example, a drawing, music, tweet, or an image. When basic needs are met, people turn to creating value in things that have no in-born value. These assets exist exclusively on the internet.
For example, if you exchange a trading card with your friend, you would not get the same card, as each card is unique in itself.
NFTs are digital, decentralized assets that have the potential to change the world of the internet. Most NFTs are on the Ethereum blockchain.
Christie’s Auction House is the first major auction house to sell a single jpeg for 69 million dollars. Nyan cat Gif is sold for $60,000 as NFT.
CHARACTERISTICS OF NFTS THAT MAKE IT UNIQUE
1. Unique And Scarce
Because of their uniqueness, NFTs hold value. It’s common sense that the lesser the number of things is, the higher the value it possesses. Similarly, NFTs are high in price because of scarcity.
2. Unbreakable And Impenetrable
NFTs are impossible to break down into smaller units. We cannot transfer even a tiny segment of it to anyone. This becomes easier with the help of blockchain to track the actual owner/ proof of origin of the NFT.
NFTs are stored in the blockchain and are well organized. This makes them highly secure. The information or data in an NFT cannot be removed or maimed or even replicated.
Data used as NFT cannot be used or traded in any aspect. They are unique. For example, you cannot swap a plane ticket with anyone, each one has your name and seat number which no one else can gain.
FIELDS WHERE NFTS HAVE POTENTIAL
Media And Entertainment
The media industry is using NFTs to code files (audio, film clips, etc.). This prevents duplication and sharing of content without consent. As pointed out earlier, NFTs can easily provide proof of the origin of an asset. This unique quality helps new channels and websites to eliminate and broadcast fake news, helping the system to work more smoothly and transparently.
NFTs are thoroughly popular in the gaming industry. It’s safe to say that NFTs caught the attention of the world from the gaming industry itself. In games based on metaverse technology that uses cross-platform non-fungible tokens (NFTs) like PUBG and Fortnite, the same armor and weapons can be tokenized in a way that transforms in-game purchases into transferable assets that may confer benefits across interconnected games or be exchanged for money or other digital assets.
Artists And Buyers Of Arts
NFTs give Artists an all-new way of representing their work and sell them and display it as NFTs. NFTs are on the verge of bringing digital art evolution to Web 3.0.
Pablo Rodriguez-Fraile, a collector, and investor bought a 10-second video artwork “crossroads” for 67,000 $ in October and sold for 6.6 million $ in February.
As the hype rose, the value of the artwork increased, which resulted in a roaring profit for the buyer and vice versa. Blockchain technology allows items/ art to be publicly authenticated and certified.
Delhi-based digital art creator Amrit Pal Singh has successfully sold his art “Daft Punk ‘’ toy face for 8 Ethereum, which equals to around 13 lakh rupees.
Artists, this way, are financially supported besides the physical work they sell in the real world.
For the buyers of the art, it is a win-win game. You gain full rights to the art you buy. But the thing to keep in mind is that the copyright of the art depends upon the seller whether to transfer it to the buyer or whether to keep it. Copyright holds all the information, for example, the artist’s details, the asset value, the date of origin, and the information of the previous owners.
Authentication Of Identity
NFTs help us create a digital identity of which we will have true ownership. You can have NFTs for your installation, tweets, and skins on gaming platforms.
Crypto-centric communities like Twitter and Discord are adopting NFTs as their avatars.
Theft of identity can be prevented with the help of NFTs like your ex-qualification, medical report, titles or deed, etc.
Luxury brands such as Gucci and LVMH can manufacture scarcity and have verification of authenticity, which especially makes these brands interested in NFTs.
NFTs can represent ownership of real estate. The owner can sell their property to a no. of small investors by issuing tokens on the blockchain. These tokens can be used to receive a rental income. People could then buy and sell fractional ownership of rental properties without a middle-man. Properties have been, however, sold and bought via blockchain for several years.
Collectables And Trading Cards
A video highlight of LeBron James was purchased for a massive 208000 dollars. A sports fan application, NBA Hotshot, now allows users to buy and trade NFTs as video clip highlights of games.
Rob Gronkowski, an American footballer, launched his digital trading cards as NFTs in March and expects to earn millions of dollars from the same. Jack Dorsey, an American Technological Entrepreneur, has put on his first tweet for sale, of which the first bid stood at 2.5 million dollars.
We have seen how human psychology has shifted, from valuing things we have in our hands to spending millions of dollars on intangible things, all because of technology. In many ways, NFTs can open fresh paths for people from all around the world in different fields.NFTs will definitely bring a revolutionary change in the coming era, but as everything has pros and cons of its own, so do NFTs have. Although NFTs are not real, they have real-world harmful effects.
Let us now see how NFTs can bring a negative effect because of the digitalization of assets and put an adverse effect on society at large:
NFTs, with no doubt, may revolutionize our society but at the same time have the potential to speed up climate disasters. NFT transactions, which must be verified through blockchain, consume a lot of energy. It takes a lot of computing power to enter records in the blockchain. The creation of an average NFT can consume 200 kgs. As of April 2021, Ethereum was using 33 Terawatt Hours (TWh) of electricity, which is the same amount of power as the country Serbia. Ethereum power consumption has quadrupled in 8 months and shows no sign of slowing down.
Threat Of Theft
Although we have known earlier that the technology behind NFT is secure enough, it’s not perfect. Many of the platforms have reported stolen NFTs which happened due to cyber security breaches
Copying Of Assets
As NFTs are purely digital, it is quite common for tech-freaks to copy the assets. Gifs, Images, Videos can be shared multiple times. The owner, however, holds the token of authenticity, several people can have the same asset as the owner at the same time.
NFT is a game of human psychology. The world is changing with the change in the needs and wants of the people. It’s a matter of a few years when NFTs would be a common thing and each one of us would have access to NFTs