Non-fungible tokens, or NFTs, have exploded in popularity, with sales exceeding $40 billion in 2021 alone. NFTs appear to be everywhere, to the point where the Collins Dictionary designated “NFT” the Word of the Year for 2021. NFTs are used to symbolize ownership in a variety of industries, including art, antiquities, fashion, festivals, music, estate, golf resorts, virtual land, in-game assets, and more.
How do non-financial tokens (NFTs) affect global finance, community, and culture?
NFTs are based on the blockchain, which is a decentralized and unchangeable database in which NFTs are rare, odd, and unique. A single NFT denotes ownership of a physical or digital object. Since its inception in 2012, NFTs have evolved from digital art to “phygital” assets, which are physical things tied to digital tokens.
While NFTs are popular all throughout the world, they are particularly popular in Central and Southern Asia, as well as North America. People have become increasingly reliant on computers and the internet as society has become more digitized, particularly in an era of self-isolation and lockdowns.
Let’s look at how NFTs are changing the world from my perspective.
Evidence of ownership
We can verify what we have, when we got it, and who gave it to us with proof of ownership. Transparency and ownership proof go hand in hand. NFTs can be used to prove ownership of any asset. Because everything is saved on your wallet address and preserved permanently on the blockchain, proof of ownership has evolved into an extremely simple and frictionless means of verification. This ease of verification can be used for anything from a concert ticket to a contract for the purchase of a business.
Decentralization
The fact that NFTs are decentralized is one of their most striking characteristics. The blockchain is a digital record that proves ownership, logs every transaction, and cuts out the intermediary, i.e. the government. Many people, including a substantial portion of the crypto community, are calling for a more decentralized future in which individuals can profit directly from their labor by cutting out the middleman and selling their services directly to consumers.
In a decentralized world, the quality of living for people like you and me might significantly increase, allowing us to earn more from our hard work and trade more effectively than ever before. Because transactions are handled directly between two parties without the assistance of a mediator, there is no buffer time.
Furthermore, decentralization means that posting or selling something does not require approval from a certain authority; instead, there are multiple nodes (stored in systems all across the network) with no single “shut-off” button.
Access
The capacity to transact 24 hours a day, 365 days a year is, in my opinion, one of the most enticing advantages of non-fungible tokens and blockchain technology. NFTs allow creators and consumers to communicate directly at any time of day or night because the blockchain is always active and people transact at all hours of the day and night all over the world.
NFTs allow producers to offer any product or service to anybody, anywhere, and at any time, resulting in a more personalized experience for both sides. Smart contracts, which can be embedded in NFTs, allow authors to add value in the form of utility, benefits, terms, and anything in between. This is the chance we’ve all been looking forward to.
Transparency
Because of the inherent transparency of blockchain technology, we may transact with complete confidence from all sides. Web 1.0 was used to gather and organize data, web 2.0 was used to generate and distribute content, and web 3.0 is the decentralized web based on blockchain technology. Because the blockchain functions as a digital and permanent record, the ability to observe each transaction is available to the public.
A transparent interpersonal interaction benefits everyone. On web 3.0, you can no longer lie about what you own, who you are, or what your interests are because everything you possess is digitally visible to everyone. Businesses and consumers alike can benefit from the transparency that each transaction on the blockchain provides when using NFTs.
Social Significance
Humans enjoy sharing their passions and interests with others. Social media is the most current medium on which everyone has discussed what they do and portrayed their version of themselves. Until now, whether or not that person is telling the truth has always been a topic of controversy.
The new type of social signaling is non-fungible tokens. Except for NFTs, you should be prepared to deal with the truth because that’s all you’ll receive. It’s reasonable to expect that as NFTs continue to revolutionize how we communicate truthfully, the general public will join the truth-seeking herd. If you spend a day on crypto Twitter, you’ll notice that many individuals are gloating about their PFP NFTs. It’s more true now than ever before.
Because the NFT community is so small, looking at which NFTs someone has and who they support can reveal a lot about their standing and knowledge in the area. This type of social signaling isn’t new, but NFTs give it fresh life. Rather than benefiting from this new fact, the fakers will be exposed. Similarly, those who are sincere will benefit greatly from remaining honest and demonstrating their sincerity through the usage of NFTs.
Digitalization
NFTs are digital assets made of nearly anything. Anything, be it a house, a car, or even an event, has never been digitized. Thanks to digitization, individuals, firms and large-scale businesses may now offer their clients everything they want, even before the actual product or experience is ready for production.
Even more absurd is the possibility of displaying anything and everything you own, all from the security of your public-facing digital wallet. Let’s imagine you recently purchased a beautiful home in Miami that also comes with an NFT. This NFT also serves as proof that you own the loan for that specific residence by storing the loan contract and allowing you to make payments from your wallet.
This is only one example of how NFTs could aid in the digitization of assets such as homes. Consider the ability to convert anything into a digital format, sell it, market it, and profit from it. My friend, this is all really realistic. Many people are now making a living by digitizing their work and selling it as an NFT, all while staying in their own homes.
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