Different cryptocurrencies are increasingly featured in the news – and of course, in the portfolios of bolder investors.
Technology and the emerging economic sector are also evolving rapidly, and it is not easy to keep up. Even in the world of cryptocurrencies, many people don’t see it entirely clear, and even fewer know about blockchains whether they eat or drink. A few months ago, the world was introduced to another term. Let’s see what you need to know about non-fungible tokens (NFT).
What is NFT, what are irreplaceable tokens?
The NFT is a virtual document that makes the property manageable in the digital space as well. An NFT based on Ethereum serves to certify authenticity, identifying and authenticating a digital device as a kind of title deed, embodying its ownership.
The essence and primary characteristic of irreplaceable tokens is uniqueness: when creating an NDP, the token’s purpose is determined – this makes it unique. It also includes metadata such as where the token came from, who created it, when, etc. This data can no longer be changed later, so the token is suitable for the unambiguous identification of a digital device.
Tokens are also indivisible. Unlike bitcoin, they cannot be divided into smaller parts but function as a whole. As unique identifiers for digital value, NFTs can be issued in limited quantities, opening up the possibility of exploiting a limited number of units for business.
Non-fungible tokens and business
The NFT is identifiable, easily transferred, and is not subject to manipulation (i.e., it cannot be copied or divided). The obvious next step as a secure digital form of asset management is the business use of NFTs.
Collectors have already slammed into the new technology. The NBA, for example, has resurrected popular basket cards from the ’90s with the help of NFTs, offering uniquely identifiable basket videos. Not to fail: By the first quarter of 2021, $320 million in turnover had already been generated, and the business was overgrowing. But tokens can also help secure the trade in digital works of art.
Tangible assets such as cars or real estate can also be tokenized – we can turn digital tokens into virtually anything. Thus, it is conceivable that irreplaceable tokens will serve as a solution to the old problem of the Internet: digital copying and theft. Speaking of which, NFT art also has a place on the World Wide Web: there are plenty of examples on this Instagram channel.
In the volatile world of cryptocurrencies, of course, we do not know whether the NDP will put the digital management of the property on a new footing. But technological innovation is already moving vast sums of money, so it will be worth watching its development.