The Supremacy of Non-Fungible Token

Non-fungible tokens or commonly known as NTFs are literally anywhere on my socials right now! It dominates my entire online media life — from Reddit, Twitter and most especially on my most used application, Facebook.

I finally had the idea of giving a paper on the supremacy of non-fungible tokens. It may still be a little fuzzy for me, but I did my best to find all the information concerning the NFTs. So, I hope you keep posted until the last part!

What is a Non-Fungible Token?

The NFTs or non-fungible tokens are special crypto coins that are based on blockchain technology and uses link with a unique digital asset that cannot be replicated. The blockchain serves as a public ledger, allowing anyone to verify the asset’s authenticity and ownership.

Although the usage of NFTs has spread in various industries, they’re synonymously associated with the gaming and digital collectibles sectors and are most commonly found as a specific Ethereum token built on the ERC-721 standard. NFTs also contain ownership details for easy identification and transfer between token holders. Owners can also add metadata or attributes pertaining to the asset in NFTs.

There are several known fungible tokens in the industry such as Ether (ETH), Bitcoin (BTC) and Monero (XMR), which you can replace with just the same token. However, NFTs hold their own unique feature and cannot be replaced in a snap. Let’s say for example, an artist can make another art with the same color and design, but it cannot be replicated in every edge.

NFTs are usually bought with the cryptocurrency Ether or in dollars and the blockchain keeps a record of transactions.

What is the role of NFT in the crypto society?

As of today, it holds a creative importance in the digital world. Crypto enthusiasts would see that NFTs can be a dominating token in the future. All kinds of property can belong to NFT — from the bus and cinema tickets, art crafts and personal data; all of these will eventually have their ownership status tokenized in this way.

Arts are just a prop in society, they say. However, NFTs could solve the dilemma of artists regarding the income they get from their crafts. They can monetize digital artworks and eventually succeed in the business. A quality work with a great income is a win-win for both artists and consumers! It can improve business processes in a long but worth the risk process.

Furthermore, NFTs could also transform music and give access to limited-edition vinyl. There are so many aesthetic things that NFTs can improvise in the current digital era.

Perhaps, the most obvious benefit of NFTs is market efficiency. The conversion of a physical asset into a digital one streamlines processes and removes intermediaries. Non-fungible tokens are also excellent for identity management. These can be a personal passport of each user which gradually improves the security. NFTs can be used for identity management within the digital realm.

The most exciting possibility for NFTs lies in the creation of new markets and forms of investment. This might be the right time to know more about NFTs, and have the ROI in the near future.

What are the risks of NFTs?

NFTs are still in an infancy stage, and just like any new asset, it will be needing a lot of development and adoption before it runs freely in the market. If an investor opts to buy an NFT and interest in trading them subsequently stalls or even wanes, prices will fall and the buyer could be stuck with large losses.

Unfortunately, since anybody can create NFTs in a blink of an eye, the scarcity of each piece does not guarantee value. Not all NFTs are useful in a sense of a user’s needs. It can also be a subject of fraud. NFTs claiming to be the works of well-known artists have been sold for hundreds of thousands of dollars but have been revealed to be fake.

Another risk to consider is that digital content is not entirely free from deterioration in quality, file formats becoming obsolete, websites going offline temporarily or even permanently, or the loss of wallet passwords.

There are still a lot of things to work on, thus, it’s totally commendable how these tokens are being the talk of the town despite being in early stage.

I hope that same as me, you are also excited about what else NFTs can show us in the following years. Thank you for reading!