Living in the most advanced times, we get to scroll through many memes, jokes, artwork, infographics, and other digital assets with our friends and families for entertainment or to gain information, or to spread awareness among people.
While going through these, did we ever wonder about the origin of these assets and the creator of digital property? The answer to this question is NFT. The story starts in 2017, when two people John Watkinson and Matt Hall, initiated first-ever NFTs called Crypto Punks. Later that year, another project called Crypto Kitties was released that went viral immediately after its release.
This article will dig deep into NFTs, how did it start and their popularity among the masses, and the benefits of NFTs for businesses.
What is an NFT?
Fungible assets refer to items or assets that are interchangeable or tradable with a similar type of asset or item. However, non-fungible asset tokens refer to unique digital items whose ownership is linked to blockchain development.
NFT stands for non-fungible tokens. NFTs are digital goods or types of the digital certificate to own the asset that has a great variety of tangible and intangible items such as virtual real estate, videos, paintings, postcards, and much more. NFTs can only be traded with assets that are of the same value.
To make things clearer, let us understand it through an example of a game ticket. If you offer someone a game ticket, then you would expect a game ticket in return. Will you accept a movie ticket or theatre ticket in place of a game ticket?
The answer is no. the movie ticket will not have the same value as a game ticket. Similarly, when we talk about NFTs, we know that NFTs are tradable with items that are of equal value. You can not replace or trade NFTs with some other item or lesser value because every ticket has its uniqueness and rarity.
What did NFT gain sudden popularity?
Numerous features have made NFTs popular among the masses. Some of them are below.
- NFT’s complete data is safely stored in Blockchain. This means that no one can replace, duplicate or destroy NFTs.
- The main reason of NFTs are valuable is scarcity. NFT developers make a limited number of tokens to maintain their value.
- They are not divisible like Bitcoins.
- NFTs can be traced back to their creator, which eradicates the need for verification from a third party.
What are the benefits of Non-fungible Tokens?
There are numerous benefits of NFTs for businesses. Following are some of the benefits that businesses can make from NFTs.
Non-fungible tokens are used to address something unique both in reality and in the digital world. NFTs have been used for gaming and collectibles in the digital world and apply to unique items in the real world, such as vehicles, houses, artisanship, and even personalities. It is used to allow access to Airbnb on specified occasions or for travel tickets.
Non-fungible tokens are safe. All the information of a non-fungible token is in the token itself. The token has additional information about the ownership and name and may extend to areas such as the history of the token or any other related data. The token may represent an image of the house, the previous owner of the vehicle, or other related information depending on the token and its use.
Security is one of its biggest advantages. Transfer of digital or physical items may result in fraud, and at the time, it is not even permissible. Due to the rarity of non-fungible tokens and the security of blockchain, exchanging items addressed by the token is a less complex and more effective method.
There are different characteristics when we talk about the characteristics of NFTs. With every advantage, there are certain risks that you must consider to prove it.
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