What are NFTs?
An NFT is a non-interchangeable unit of data stored on a blockchain, that represents real-world objects like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable with other items because they have unique properties.
NFTs provide a public certificate of authenticity or proof of ownership that can only have one official owner at a time. They are stored and secured by the blockchain, which means no one can modify the record of ownership or copy/paste a new NFT into existence.
What are the NFTs Use Cases?
The massive interest in non-fungible tokens has led to a boom in crypto-collectibles and NFT art. These are two of the most prominent use cases in the DeFi ecosystem, but they aren’t the only applications. Scarcity and uniqueness make non-fungible tokens a good match for real- world assets, logistics, music royalties, and more. As NFTs mature, we can expect to see further adoption of more experimental use cases.
Here we will resume some of the most used applications for NFTs:
- Art: NFTs have helped to solve the long-standing problem with scarcity in digital art. How do you keep virtual artwork rare when you can digitally copy it? While there’s fake art in the real world too, we’re usually able to authenticate them. Crypto art gets most of its value from verifying its authenticity and ownership digitally. Proving ownership of that particular asset makes crypto art one of the most popular NFT use cases out there.
- Collectibles: Other of the most common NFTs use cases are collectibles; From NFT collectible trading cards to Tokenized Tweets, NFT collectibles are one of the most used applications to NFTs out there.
- Gaming NFTs: Gaming has a huge demand for unique items that are tradable and purchasable. Their rarity directly affects their price, and gamers are already familiar with the idea of valuable, digital items. Micro-transactions and in-game purchases have created a multi-billion-dollar gaming industry that could tap into NFTs and blockchain technology.
- Music NFTs: Like an image file or video, you can also attach audio to an NFT to create a collectible piece of music. It may be a digital “first edition” of a record. Attaching a song to an NFT is similar to our art example, but there are other use cases, like the fair share of royalties to artists since every transaction is publicly available thanks to blockchain technology.
- Real-world asset NFTs: Linking real-world assets with NFTs can digitize the way we prove ownership. In real estate, we typically deal with physical property deeds. Creating tokenized digital assets of these deeds can move highly illiquid items (like a house or land) onto the blockchain. With smaller items like jewelry, an NFT can help prove legitimate ownership when reselling. For example, a genuine diamond usually comes with a certificate of authenticity. The same concept is possible with NFTs. By having an NFT associated with an item, owning the NFT can become just as important as owning the asset.
- Logistics and Supply Chain NFTs: Blockchain technology can be useful in the logistics industry as well, mostly for its immutability and transparency. These aspects make that supply chain data remain authentic and reliable. With food, commodities, and other perishable goods, it’s important to know where they have been and for how long. Using NFTs and blockchain technology we can track products containing meta-data on their origins, journey, and warehouse location, making the tracking for the final user easier and transparent.
Want to know more about Rytell?
Rytell is a new NFT MMO project launched in Avalanche that presents a high-fantasy world, introducing lands, playable characters, weapons, resource gathering, and real time PVP/PVE; experience a comfortable gameplay while you get immersed in Rytell’s lore.
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