Non-fungible tokens (NFTs) are everywhere in the blockchain world these days, and they’re being touted as the next big thing by many top industry experts, including Ran Neu-Ner, Eric Ly, and Kyle Samani.
However, while they’re bound to bring disruption to various industries, there are still some unknowns regarding how they will impact our world in the future. Here’s what you need to know about NFTs and their role in the future of blockchain technology.
Introduction to Non-Fungible Tokens
Non-fungible tokens (NFTs) are a relatively new form of cryptocurrency. In fact, many cryptocurrencies that you’re familiar with—such as Bitcoin, Ethereum, and Litecoin—are fungible tokens. This means that each token can be easily replaced by another token of equal value and these assets are generally interchangeable. For example, if you owned one Bitcoin and wanted to trade it for another asset or service, you could do so by trading your Bitcoin for something that had equal value in exchange. NFTs work quite differently than fungible tokens because they’re actually unique assets; each asset has its own specific identity on a blockchain network.
The best way to think about NFTs is by comparing them to cryptocurrencies. Fungible tokens are basically like another cryptocurrency like Bitcoin or Ethereum, so if you owned a currency you could trade it for a different currency or an asset. In other words, these tokens are fully interchangeable and each token has equal value. By contrast, non-fungible tokens have unique identities on a blockchain network that make them stand out from other assets. This makes fungible tokens more useful in situations where fungibility isn’t important because users can easily distinguish between different units of a token.
Is there a future with NFT?
The term non-fungible token has become ubiquitous in conversations about blockchain. Many people have started talking about non-fungible tokens and some have even begun using them, but many investors and businesses are still asking themselves a fundamental question: why do we need non-fungible tokens and what’s their role in our future? This may seem like an unanswerable question, especially given that each token seems to be designed for a specific purpose, but there’s actually more room for generalized usage than you might think.
All tokens aren’t created equal. Just like you wouldn’t use a wrench to hammer in a nail, each token has its own specialized uses. Some are designed to encourage behaviour while others offer ownership rights or represent digital items or services. In many cases, tokens may only be useful on their own platform because they rely on an ecosystem that doesn’t exist outside it. Even if these blockchain platforms do catch on and gain traction in the wider market, many assets won’t be able to travel with them. So why should we expect non-fungible tokens to succeed when all other assets don’t?
History of NFTs
NFTs have a history of use as decorations in ancient Egypt, and also serve as decorations for events such as weddings. They have been collected since their inception, though many are currently stored by collectors in a museum-like fashion. Their future prospects seem hopeful thanks to their new commercial popularity. There seems to be a trend toward NFT collectables being displayed on sites like Reddit, Imgur, Twitter and other popular sites among crypto enthusiasts and general internet users alike. In addition to that commercial popularity of NFTs seems to stem from an increased interest in blockchain technology more generally.
Is NFT a good investment?
In short, yes. Non-fungible tokens are becoming a popular form of tokenization, with a high potential to continue their upward trajectory. non-fungible tokens create a brand new market within any industry they’re used in and provide an innovative way for players across industries to conduct business. They open up new opportunities for developers and creatives by creating digital scarcity. However, non-fungible tokens can be used for more than just digital art or collectables; there are many other forms of non-fungible digital assets that companies can tokenize from medical records to smart home devices.
How will NFT change the world?
You may be familiar with one form of blockchain technology, tokenization. This blockchain concept allows people to buy and sell digital assets—such as cryptocurrencies like Bitcoin or ICO tokens—on a distributed network. While it’s true that tokenization is driving innovation in fields like finance, healthcare, and supply chain management, it’s not necessarily cutting-edge. That honour goes to Non-Fungible Tokens (NFT), a relatively new development in blockchain technology.
Ethereum Blockchain Solutions
The Ethereum blockchain can be used to make a registry of digital assets that are unique, one-of-kind, or limited in number. Artworks can have embedded NFC chips, that when viewed with an NFC enabled mobile device display information about that artwork. The artist will then have complete control over who views their artwork and will know exactly how many people have seen it and for how long. This technology is known as nametags or Near Field Communication (NFC) tags and while they’re not limited to the art they open up a world of opportunities in new ways to interact with objects around us. These are just some examples of how Ethereum can revolutionize our everyday life.
With blockchain technology, we can track who has viewed each artwork and whether it’s been authenticated by a trusted third party. Once artwork has been confirmed as unique by an outside party, that information can then be embedded in an NFC tag inside the artwork. Whenever someone with an NFC enabled device comes within a certain distance of that painting, for example, their phone will pop up a notification about it (much like you get with Apple Pay when you walk into a store). The person may also receive further information, depending on how much data has been embedded into that tag. This way we get around any potential privacy issues while still providing full transparency to both artists and their clients.
Gaming Use Cases
A good place to start, for gaming enthusiasts especially, is to think about how non-fungible tokens can be used in a game that already exists. Some ideas could include Black Friday sale items that are only available through limited-edition cards; Cryptokitties with rare appearances and stats; or if you’re not into video games, an app such as Craigslist where each item on a For Sale list has its own unique ID. ERC-721 makes it possible to track individual inventory of these items and trade them between users with trustless smart contracts.
Some blockchain games have already been experimenting with NFTs, including CryptoKitties, where users buy and sell cats using ERC-721 tokens; CryptoPunks, which also allows you to purchase a collection of digital art; and Gods Unchained, which features ERC-721 token cards that can be used to represent characters in a game. To continue that trend in 2019 and beyond, we expect more video game developers to implement non-fungible tokens into their games. The benefits include improved user experience by offering more customization options (like clothing or accessories) as well as enhanced security through immutable digital ownership records.
There are already over 30 million people who are playing virtual reality games, which means that there will definitely be a huge consumer base in less than 10 years. With that many people participating in a single activity, there will have to be a lot of virtual reality games for them to choose from. The industry has also taken note, as Venture Capitalist firms have invested over $1 billion into virtual reality gaming startups. Since so much money has been invested and there are already 30 million users, it seems clear that virtual reality gaming will continue to expand rapidly.
Virtual reality gaming has changed a lot since it was first invented, but there are still many more changes to come. In fact, virtual reality gaming will change in four main ways. First, virtual reality gaming will be more accessible than ever before. Second, it will allow for new games that could never be played before. Third, people around the world will play together in a way that has never been possible before. Finally, virtual reality games and other technology such as augmented reality devices can be used by marketing teams and social media sites to advertise their products and spread awareness about their businesses or ideas.
Although all of these future developments look extremely promising for those who have invested in virtual reality gaming startups, there are some potential problems as well.