What are NFTs? A Simple Guide to Understand The Most Revolutionary Application of Blockchain Technology!
The popularity of Blockchain technology has skyrocketed tremendously over the past few years. With the advent of cryptocurrency, people are now realizing the potential of blockchain technology in the Defi sector. Thus, one such upcoming trend after cryptocurrencies is the NFT’s.
Source: HedgeEye
What are NFTs?
NFT are the Non-Fungible Tokens and it stands for being unique. It is a kind of trading card, which cannot be replaced. For example, cryptocurrencies are also known as fungible tokens — trade one for another, and you’ll have the same thing. At a very high level, NFTs are a part of Ethereum Blockchain.
How Do They Work?
Nfts can be minted in the form of any digital asset and can be bought, purchased, or traded. The trend was started by Ethereum blockchain, Ethereum has its token standards such as ERC-20, ERC-1155 & ERC-721 but in this case, for building NFTs we use the ERC-721 & ERC-1155 token standards.
ERC-721 Standard
ERC-721 is a token standard used for representing the ownership of the non-fungible token. It is a smart contract that provides functionality such as :
1 Trading NFTs
2 Minting NFTs
3 Transfering Ownership
ERC-1155 Standard
ERC-1155 is a multi-token standard that is widely used for NFTs and fungible tokens. Doubtlessly, ERC-721 is a suitable contract for minting NFTs and transferring them between wallets, but when an individual is transferring a collection of digital assets the process becomes slow and inefficient. However, ERC-1155 is a multi-token standard, it helps in transferring a collection of digital assets easily and is comparatively more efficient than the ERC-721 standard.
Is NFTs Worth The Hype?
An artist from Wisconsin known as Beeple made international news this year when a piece of his digital artwork sold for $69.3 million at Christie’s, a record-breaking amount paid in a new category of assets called nonfungible tokens (NFTs). Perhaps we were skeptical about bitcoin a decade ago, but now it’s worth close to $60,000, and now we are looking at NFTs in a different light
NFTs may play an important role in the future of publishing, music, and art. For instance, a digital-first edition of a new book from a respected author might be enticing to a literary audience. The publisher could produce subsequent editions, but only the first 10,000 copies would be designated as a first edition by individual NFTs. Moreover, musicians are already starting to adopt this strategy.
Applications of NFTs
Now let’s deep dive into some use-cases of NFTs :
1 Gaming: NFT in gaming is attracting a lot of attention because gamers nowadays can make a fortune by making NFT of their gaming designs and can purchase NFTs of their favourite characters on marketplaces such as Opensea.
2 Art: Artists can tokenize their arts in the form of NFTs and instead of selling them in galleries they can list their digital arts on NFT Marketplaces.
3 Fashion: Adoption of NFTs in the form of unique apparel can be initiated, which will help in supply chain management. Furthermore, this will allow customers to keep track of the apparel and who was holding them earlier.
4 Sports: Sports industry is adopting the tokenization of players. Athletes can make their NFT, place them on sale on the marketplace and earn royalties.
Final Thoughts.
To conclude, it is apparent that NFT’s has a lot of potential and are here to stay for a long time. With the given applications, they have other use cases as well because many industries are adopting Blockchain and tokenization of assets.
About Deefy
Deefy is a decentralized protocol that enables financial utilities on NFTs such as Renting, Lending, and Pay Later.
Deefy’s Vision
Deefy’s vision is to create a revolutionary shift by introducing a truly decentralized ecosystem and creator-centric financial instrument for creators, influencers, Gen Z & micro-financiers.
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