NFT (Non-Fungible Token) Utility: What Are NFTs and How Can They Be Used?
Today, NFTs (non-fungible tokens) are more speculation than useful technology. It is regarded as a way to change the structures of rights to practically anything – paintings, books, content pieces, music, documents, and everything else that has art associated with it.
Here, we will be digging deep into the actual utility NFTs can give us not later, but right now, so the hype and clout about digital ownership could be fulfilled.
What are NFTs?
NFTs (non-fungible tokens) are now a must-know concept because there’s really no arguing about it, you are not fooling anyone.
The number of possible use cases for NFTs is really wide and everything you can think of can be backed by a token. This means that it is rather evident that there can be literally thousands of possible ways to use a token and one cannot exhaustively list them all in this very article.
One cannot but agree that the way to use NFTs in real life is to start experimenting and understanding them better. As the experts in this space say, NFTs have all the things that tokens had when they started.
But not all tokens are worth NFTs and that is where the confusion and dithering is. There are two broad groups of tokens with some overlap.
The Utility of Digital Ownership
If you are currently looking for a reason to own an original file containing a digital copy of a painting or music, and you own a digital copy of it already, does that mean you don’t really own the original painting or music? We’ll see how much utility it can bring soon.
The NFT Opportunity is Now
The NFTs could be the wave of the future. For instance, if the owner of the NFT wants to transfer the ownership of the NFT, can that be done? Can the owner of the original painting want to transfer the ownership of the original painting to someone else?
The answer is yes, and the reason is that the traditional concept of ownership is not really sufficient, with the advent of the digital economy. Most people are under the misconception that the ownership of digital content has a limitation.
Creating a digital asset
The first step in creating an asset with NFTs is through a process called a collaboration. Through this method, an artist or a designer creates something, which is then distributed to the network of peers. The artist, in turn, earns income from their creations and the network of peers is enabled to buy and sell this new asset.
Security issues with NFTs
Throughout the years, cryptocurrencies, specifically Bitcoin, have been facing a lack of trust due to hacking and the threat of censorship. For example, on December 31, 2017, a Silk Road 2.0 version was said to have been hacked and $30 mln USD was allegedly stolen.
On top of that, authorities banned Bitcoin in China. Besides, financial regulators also warned several companies regarding selling their cryptocurrencies to consumers. This has resulted in market sentiment for Bitcoin is a bit shaky in the last few months.
Here, you can see that the first thing that an investor will look for in the market is how he will be able to safeguard his digital money.
How are NFTs different from normal currencies and other digital assets?
NFTs (non-fungible tokens) are able to be bought and sold without the need for a middleman. Also, NFTs (non-fungible tokens) cannot be “whipped,” meaning they cannot be copied. One of the reasons behind this is to ensure the fair transfer of ownership of the asset to the end-user. This is to ensure the consumer does not feel ripped off.
Trading digital assets
In order to trade digital assets, you first need an account on an exchange. This account can be either a bank account or an Ethereum wallet. The process of acquiring an Ethereum wallet usually involves Ethereum mining which requires buying the crypto coin to get the keys.
Once the wallet is owned by an Ethereum user, he or she can use it to receive the digital asset. It usually requires providing a digital signature as an authenticator to the service so that the company handling the service can make sure that the person is the real owner of the assets and not some scammer trying to scam them.
NFTs do not meet the traditional criteria to represent art, but since the creators are still active in our society, it would be hard for them to dump their ownership in the system. Because of this, the tokens could be issued by the vendors of artwork for people who could then put it on the market for the potential buyer to purchase.
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