With recorded global trades worth 4.62 billion as of January 2022 - Non Fungible Tokens aka NFTs are picking up pace like no other digital gigs in the past have. Some say NFTs are just a fad and will soon wear out, while some have high hopes from it and believe that it is here to stay. Only time will tell what it actually has in store for us, for now we will tell you about what NFTs actually are and the positive impact they have on our real world physical assets.
What are Non-Fungible Tokens (NFTs)?
As we are entering a new unexplored era of technological advancements more and more technologies are emerging, Non Fungible Tokens are one of them, although they have gained massive exposure and popularity across the globe like no other. NFTs are a way in which artists and creators can register their talent in the form of artwork, music, videos, in-game collectibles, avatars etc. on the Blockchain. It is a one of a kind token or key that gives its owner total control and access over it. NFTs are in the form of digital assets which can be used in the virtual world or Web 3.0.
The core essence of these tokens are that they are non fungible, which means that they cannot be replicated or copied. There can be no two identical NFTs. This is what makes them rare and unique.
Different Types of NFTs
· Avatars
· Paintings
· Artwork
· Music
· Videos
· Mascots
· In-Game Objects
· Real World 3D Objects
· Memes
· Profile Pictures
· Trading Cards
· Property/Land
· Home Interiors
· Vehicles … and much more.
Unlike with physical objects in the real world, the concept of a Non Fungible Token is designed in a manner to give creators and designers a secured way to ensure ownership and copyright of their creation while also explore their imagination and build something unique. Also, there is no intervention or need for any third-party to be involved. This itself is one of the prime components of NFTs.
In our world where the Metaverse is emerging with a vision to allow people to go beyond physical limits and explore an entire new virtual landscape, NFTs have a lot to offer and are also known as accelerators of the Metaverse.
**Stats Say – Nearly $41 billion worth of cryptocurrency was spent in the NFT marketplace in 2021.
Impact of NFTs on Real World Physical Assets
Ideally a Non Fungible Token aka NFT is a cryptographic token assigned to a particular digital asset. However, this digital asset can represent real world physical objects and things.
Counterpart with the real world, Non Fungible Tokens cannot be replicated or copied because they are built on Blockchain technology. This technology allows creators to upload their work in blocks. When these blocks reach their individual storage limit, they form a chain to secure the data and keep it explicit and unique. So this makes it impossible for anybody to duplicate the NFT. We can closely relate it to how no two fingerprints can be the same, no two NFTs can be the same either. This means that now people can upload their NFTs without the fear of any copyright issues, unlike real world physical assets.
Before the emergence of NFTs it was difficult for people to fractionalize ownership of certain real world physical assets like rare wine, fine jewellery, renowned paintings etc., but with the emergence of NFTs, asset owners can now divide a digitized version of their particular asset and have multiple digital owners instead of only one physical owner. It is now possible for people to buy NFTs of real world physical assets and claim their ownership over it.
Creating NFTs of real world physical objects and things is the next evolution of trading too, now asset owners can have both virtual and real assets in their control. And what makes this evolution even more fruitful is that because NFTs are made on Blockchain technology, their complete history will be visible to owners, making the asset even more appealing and incentivized. Owners can leverage this tool to maintain data and records of their physical assets in a completely safe and secure manner.
Non Fungible Tokens (NFTs) can be considered as a digital form of investment that is made towards a real world physical asset. Yes, imagine if you are a sneaker head and you missed out on the limited edition “Air Jordon” in the real world, but you could buy an NFT of it to feel the satisfaction of owning it. NFTs allow you to own unique digital replication of real world physical assets like never before.
NFTs permit people to liquidate their asset and sell parts of it like shares. This means that owners now do not have to completely give away their entire asset, they can sell parts of it as per their wish. Also, buyers who may not have been able to afford the entire asset can now pay a lesser price and own a part of it. This makes it a win-win situation for both parties.
Since the Metaverse is here and it is envisioned to be a real life like virtual 3D platform where people can practically live and carry out their daily activities like grocery shopping, attending class, working etc. the need for Physical Asset NFTs is only going to rise, as the core essence of Metaverse is to give people a virtual world parallel to their real physical world, and what better implementation than showing people real world digital physical assets just like the one in their real world.
Closing thoughts..
Physical Asset Non Fungible Tokens enable owners to retain their physical asset with them while still being able to sell part of it digitally. The cherry on the cake – Now owners do not need to sell the entire physical asset at once, they can sell parts of their digital NFT and retain a majority shareholding of their asset.
