NFTs

What are NFTs?

NFTs, or Non-Fungible Tokens, are a type of digital asset that is stored on a blockchain. They can represent anything from a piece of art to music to a video game item. NFTs are unique and cannot be replicated or replaced by another token, making them valuable. 

Many small businesses are already using NFTs to market their products and services, and there are endless opportunities for businesses of all sizes to take advantage of this new technology.

What is a blockchain?

A blockchain is a ledger used to record and store transactions.  It is distributed and shared among a number of computers. This distributed ledger of transactions is decentralized, as there is no single point of failure or single entity which can control a blockchain. The term ‘block’ refers to each unit of data, or block, which is stored on the chain.  Blocks in a blockchain are linked in chronological order.   

Why are NFTs important?

NFTs have a number of advantages over traditional forms of ownership, such as offering greater protection from theft and fraud, security, providing a more efficient way to transfer ownership and creating liquidity in assets. 

NFTs also have the potential to revolutionize the way we interact with digital content, by making it possible to monetize and reward creators in new ways. Ultimately, NFTs offer a more secure and efficient way to own and manage digital assets, and their adoption is likely to increase in the years ahead.

NFTs provide a new monetization channel for creators that complements existing channels. Instead of monetizing access or attention, NFTs monetize ownership. Through math and cryptography, digital goods that live on a blockchain can have a single owner. The wider implication is that NFTs make the internet ownable.  

How do NFTs fit into the history of the web?

Web 1.0 was mainly about information, links and web pages. Web 2.0 was about social links (likes, follows, shares). Web 3.0 is about economic links such as tokens you earn, assets you own and investments you make. The promise of NFTs is that more power and wealth created in web 3 will move to the hands of individual creators and small businesses who can control and distribute their work without a middleman.  

Web2 excelled at monetizing artificial scarcity through paywalls for content, courses, and communities. Web2 is also great at monetizing attention through ads. But as we’ve seen, ad platforms heavily favor large creators and optimize for certain engagement metrics that aren’t always in the best interest of people consuming the content.

What are the benefits of NFTs? Can you list some examples?

Every NFT created can be traced back to its original creator. It is easy to verify who created the NFT and when.  Once created, NFTs cannot be stolen or manipulated.  This is where the term immutable accurately comes into play. NFTs can also be programmed to generate royalties which can be sent back to the creator or seller.  

As a creator you also have the power to determine the specific number of NFTs in collection, or scarcity.  This gives you the power to control the number of originals created, and thus the economy surrounding your work.  

NFTs offer many advantages for artists, businesses, banks, realtors, and creators. One key benefit is that they help to verify the authenticity of digital content. This is important for businesses and creators who want to make sure that their content is not being plagiarized or copied without permission. NFTs can also be used to track ownership of digital assets. This is beneficial for banks and realtors who need to keep track of ownership of physical assets. 

NFTs can be used to create unique digital experiences. For example, a musician could use an NFT to sell a virtual concert experience that can only be accessed by the person who purchased the NFT. The utility of the concert could be extended to include a backstage pass and perhaps future benefits to increase engagement between fans and artists.  This creates a sense of exclusivity and can be a powerful marketing tool. 

NFTs give artists the opportunity to scale their work globally without relying on the traditional legal or financial structure. 

What examples of some industries already using NFTs?

Currently, there are a few different industries that are using NFTs. These include blockchain companies, real estate, deFi, DAOs, startups, and cryptocurrencies. 

Blockchain companies can use NFTs to store data in a secure and distributed manner. DAOs, or Decentralized Autonomous Organizations, can use NFTs to represent ownership of assets and track voting rights. Startups can use NFTs to raise capital and fund their operations. Real estate owners can create liquidity and fractionalize their property through NFTs.  And finally, cryptocurrencies can use NFTs to represent tokens or units of value. All of these industries are just beginning to explore the possibilities of NFTs, and as additional utility and functionality are integrated into smart contracts, NFT use cases will expand to different industries.