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Non Fungible Tokens (NFT) are a special type of crypto token backed by an asset. They are non-interchanged with each other and are non-divisible. It can be used in gaming and crypto collectibles. The popular non-fungible token standards are ERC721, ERC1155, ERC20, and TRC721. NFT’s are mostly stored in suitable digital wallets such as MyEtherWallet and Ledger Hardware wallets. They can be customized and traded in the market easily.
What are the Different Areas where NFTs can be utilized?
- Gaming — Players can use the NFT to trade their digital assets and earn more points or scores by playing video games. The tokens will be authenticated and verifiable to all the participants of a game. Users can utilize their gaming prowess to the fullest extent and generate revenue on a real-time basis. It can be used to buy weapons, vehicles, and characters. This can also establish a well-organized gaming marketplace in the future, where users interested in the virtual world will be able to purchase many games and compete actively.
- Artwork — Artists can also make use of NFT and showcase it to their potential customers. The token will contain all the details like the date of origin, previous history of ownership, information about the particular artist, and the assets’ total value. Artists can get the actual market value for their effort in the form of peer to peer payments and need not rely on the services of any intermediaries or third parties.
- Identity Management — With the need for secure digital storage of data increasing in this technology-driven world, Non-Fungible Tokens (NFT) can contain unique information about a specific asset. Any kind of data like medical history, property details, a personal profile, education qualifications, and financial information can be included.
- Media and Entertainment — Piracy, copyright infringement, and plagiarism are significant challenges affecting the media and entertainment industry’s growth. NFT can use blockchain technology to prevent such fraud, making replicating ideas, and creative work impossible.
- Real Estate — The traditional Real estate industry records all the land titles and property registration through cumbersome paperwork. NFT’s will digitize the entire process. The property can be tokenized on the blockchain network and be divided into tradable tokens that can be easily exchanged in the leading secondary markets. This removes the role of middlemen like brokers, banks, agents, and lawyers. It also prevents any dispute in ownership of property between any two parties. In Decentraland, a popular virtual marketplace, NFT can be represented as parcels of land in various districts. The users can monetize the property by leasing it out to other co-gamers or utilizing it for advertising.
Non Fungible Tokens (NFT) can also play an active role in event management, digital asset management, licensing, taking care of certificates, maintenance of attractive collectibles, and the sports industry to store the records of teams and athletes.
What are the latest NFTs emerging in the market?
* TRON has come out with an NFT named TRC721 on its blockchain network. All the information regarding the Non Fungible Tokens (NFT) are stored safely in the smart contracts. It can be seamlessly integrated with various DApps and DeFi projects of TRON. This will strengthen TRON’s position in the crypto economy and it can use its speedy network and low transaction cost to compete with Ethereum in the NFT space. The TRC721 NFT can be used to represent any digital or tangible asset easily.
* Binance is making efforts to launch an NFT incentive program on the Binance Smart Chain. It will be used to empower NGOs and charities in China. Volunteers can buy the NFT and get attractive gifts and rewards. It also offered NFT’s for Halloween and Christmas. The Binance Launchpad also offered users to buy digital land NFTs through its platform.
* DIGITALAX, an NFT, has been launched on the Ethereum blockchain network. It focuses on the fashion industry. They are working with several fashion designers now globally. The designers get royalties whenever someone purchases their product. DIGITALAX also organizes various auctions for the users to participate on its platform. It also aims to integrate its offering with gaming and virtual reality platforms.
* Beeple, an NFT, raised a whopping $3.5 million in an auction conducted by an online auction house named Nifty Gateway. Beeple was created by a graphic designer called Mike Winklemann. Mike believes that digital artists will be able to make more money in the future if there is a change in the current business model.
The Main Obstacles to the Growth of NFTs
- The regulatory uncertainty that refuses to make a transition from the rigidity of centralization to the flexibility offered by decentralization.
- The lack of adequate technical and economic infrastructure affecting the usage of Non-Fungible Tokens (NFT).
- Doubts regarding the scalability of blockchain technology are hindering the adoption of NFT’s.
- Chances of higher transaction fees in case there are some congestion issues in the blockchain network.
- Issues in user experience, especially when Non-Fungible Tokens are distributed to a lot of people at the same time.
Some Popular NFT Projects in the Market
Rarible — It is an organized and completely decentralized marketplace where digital collectibles can be easily created and sold. The users get flexible payment of royalties. They can unlock new items, participate in leading auctions, and receive exciting rewards. It also has a governance token named RARI that can be used to vote on the platform’s governance issues. All the creators are extensively verified and given a customized badge to ensure a high level of authenticity.
GRAP Finance — Grap. Finance is a fork of the decentralized YAM protocol. It has a native token named GRAP that the users can store in a digital wallet. The platform frequently creates new tokens as per the demand witnessed in the market. It contains a list of different wine brands and the users will gain a percentage share of the profits depending on the demand for the wine from other users on the platform.
Aavegotchi — It is a DeFi platform owned by Aave where the users can stake crypto-collectibles with ease. It has a governance token called the GHST token. The NFT’s powered by DeFi are staked with interest-generating tokens. The tokens can be stored securely by connecting any compatible wallet to the platform.
Non Fungible Tokens (NFT) has a promising future ahead with more number of users and the increasing adoption of blockchain technology. Crypto collectibles, gaming, and artwork are the most commonly used NFT’s now. It brings in a lot of innovation and enhances the operations of different industries altogether by providing the benefits of the digital economy. More awareness will boost its usage in the years to come.
Blockchain App Factory develops NFTs that can be used as crypto-collectibles, in games, for trading in assets, identity management, asset management, and software license management.
Also published at: https://medium.com/datadriveninvestor/non-fungible-tokens-nft-may-become-the-trendsetter-in-the-industry-47880fe20626
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