NFT — A Nascent Frontier Technology
It’s painstakingly clear that we are all here for the tokens. We want to buy them, hold them, sell them, give them away, appreciate their utility (whether that is staking, gaming, a credit system, or something completely different), and most importantly, know that we are the owners of those specific tokens and nobody else. The key to unlocking that certainty is, quite literally, the digital key (i.e., the private wallet address holding the tokens on the blockchain).
Now, having said that, we are still facing a tricky situation in some other parts of the digital ownership world. We navigate in a world where we want to own things. That can be art, real estate, and plenty of other types of rights to tangible and intangible property. You name it, someone will probably own it somewhere. To ensure that someone claiming ownership can be verified as the true owner, can be done with paper contracts, passport verifications, signature checks, and plenty of other time-consuming procedures. If only there was an easier and faster way.
Well, technically there is. It’s called an NFT, or Non-Fungible Token, the digital answer on the blockchain to ownership verification problems in the analog world. Of course, today the technology is not very mainstream, and there are certainly a lot of improvements to be made. But the revolution is on its way, and even though the public generally laughs away the overpriced JPEG monkey art as a cruel consumer joke, the technological leapfrog and potential value NFTs can hold are already visible in many areas.
Let’s dive into this topic a little deeper to understand what an NFT is, where it has been used thus far, and what the potential next steps could be.
What is an NFT
An NFT, or Non-Fungible Token, is a digital asset that represents ownership or proof of authenticity of a unique item, piece of content, or digital collectible using blockchain technology. Unlike cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH), NFTs are distinct and cannot be exchanged on a one-to-one basis due to their uniqueness. Each NFT is stored on a decentralized ledger, ensuring transparency and scarcity. NFTs have gained popularity for various applications, including art, music, gaming, and virtual real estate, offering creators a new way to monetize and sell their digital creations while providing collectors with verifiable ownership of digital assets.
The Value of This Emerging Technology
As mentioned above, non-fungible tokens serve a multitude of use-case applications. We are not only referring to content creation monetization, gaming within the metaverse, music, entertainment, or art, but also to more tangible purposes.
For example, Ticketmaster is employing token-gating blockchain technology, with a focus on NFT properties, for their ticket sales. This primarily serves the purpose of ensuring that only valid ticket holders gain access to physical and virtual events. Furthermore, it can also prevent counterfeiting, scalping, and various other fraudulent activities. While users have been using mobile applications for years to access events and public transport, this change may seem minor. However, it signifies mass adoption, leading to streamlined ticketing processes, improved reliability, flexibility, and security.
Another potent example of real-world NFT adoption is in the real estate sector. Although the adoption process is slower, initial attempts have been made to create more efficient pathways for buying and selling properties through non-fungible tokens. The concept of “time-share” property holdings has been known for a very long time, but through blockchain technology, it can lead to even more fractional ownership and accessibility for retail investors. The benefit of this approach is fewer intermediaries (such as brokers) to deal with, resulting in reduced costs. Even more potent as an advantage is the fact that NFT-based real estate provides transparency in transactions and ownership, along with a tamper-proof record to prevent potential fraud.
In addition to these two examples, which have massive potential to become financial powerhouses within the NFT sector, there are numerous other industries where NFT technology can have a significant impact. Consider supply chain management, healthcare, patents, digital identities, or education and certification, to name just a few.
The Risks Related to Non-Fungibility
Although the technology has sunny prospects with numerous benefits, there are obviously some risks to consider. One major concern is that many projects are dabbling in the technology without creating more than hype or a fad, taking advantage of gullible investors. The next concern is what we might call unfortunate scams, where a project had good intentions but, in the end, their incompetence leaves trusting and positive retail investors with nothing to show for it except an ID in their wallet (let alone a basic picture or artwork).
To be honest, there are plenty of issues that need addressing before the mainstream can be served with high-quality services within the NFT sub-sector of the crypto industry. Investors and traders need to be aware of regulations (or the lack thereof), incredible market volatility, promises lacking intrinsic value, copyright claims, scalability concerns, security risks, hackers, and scams. While most of these issues probably won’t disappear, especially criminal risks, the intention and path forward are to mitigate these risks as much as possible to ensure diligent users that their research will lead to suitable options. At the end of the day, all we want is investment options that allow us to sleep peacefully at night and live our lives throughout the day.
Final Thoughts and an Outlook
Even though the road ahead is still long and winding for retail adoption to take place, the trend is clear. With companies already incorporating the technology on the backend of their services, it is hard to believe it won’t endure in the long run. Where NFTs will find potential success is difficult to predict, but trial and error is a natural part of any emerging and growing industry. We are living in exciting times when it comes to technological innovation, and we should certainly not turn a blind eye or dismiss these initial attempts. Just remember, the credit cards we know today were invented in the early 20th century, but mass adoption only occurred in the late 20th century, with several decades of development stages in between. Success is not an overnight occurrence, even if sometimes it may seem that way to outside observers. Don’t be misled; take a closer look before forming your opinion (not just about this topic).
Hopefully, this article has provided you with initial insights into a vast subject to continue your research and discoveries. We at Fish and Chips would be delighted to have you join our Discord Community (https://discord.gg/UZxPcHSJZ7) to discuss your opinions and views on this topic, as well as many other crypto-related topics in the future.
As we aim to become a platform with educational properties and entertainment, we also encourage you to join our weekly game night streams (Fridays at 19:00 UTC), where our members have the opportunity to win exciting gaming-related NFTs.
We look forward to seeing you soon and thank you for reading.
