Non-fungible tokens or NFTs have been in the spotlight for almost all of the first half of 2021. The ability to represent a unique asset digitally and have an immutable proof of ownership appealed to the users which resulted in the exponential growth of this space.
What started out as a way to digitalize original artwork, ended up in digitalizing memes, intellectual property, and even tweets.
At their core, NFTs allow a seamless transfer of ownership by leveraging Blockchain technology. The Blockchain ledger keeps an immutable record of the ownership which offers benefits such as traceability to the origin and establishment of authenticity. Furthermore, the use of NFTs unlocked the potential liquidity of the previously illiquid assets.
In essence, NFTs store the metadata of an asset on the Blockchain. Each transfer of NFT represents the ownership of this metadata being transferred. The metadata represents the unique properties of an asset giving it an identity in the digital space. Whoever owns the metadata, owns the underlying asset in the real world.
NFTs beyond the hype
The NFT craze has been perceived by many as a bubble that will eventually burst. Having previous experiences with the ICOs, it is only natural that NFTs are being held under a microscopic view. Especially considering the more recent example of Dogecoin where social media hype led to a great loss for many people. This is where sustainable applications of NFTs save the day.
An NFT sold by Beeple at $69 million, a Tweet of Jack Dorsey sold at $2.9 million, and a CryptoPunk Avatar being sold for over $11.7 million represents more of the hype created by NFTs than their potential use-case.
According to Nonfungible, a website that tracks the NFT market, NFT sales have been decreasing gradually since 1st June. Just in a span of one month, NFT sales decreased from a whopping $176 million in mid-May to just $8.7 million in mid-June.
All this represents is that the purpose of NFTs has been restored. Real-life use cases that add actual value to the life of a person have become mainstream.
Sustainable applications of NFTs
The applications of NFTs have been evolving more than one can fathom.
For instance, using NFTs to represent intellectual property. Something like copyright or an idea that is considered invaluable can be represented as an NFT. Even if it is not for the purpose of trading, it provides digital proof of ownership that comes with its own set of benefits.
From a trading perspective, using NFTs to tokenize songs and videos is another fascinating concept.
Cricket Foundation is another suitable example of the true value of NFTs.
Not a meme or fictional character, Cricket Foundation bridges that gap between cricket fans and their favourite sport through NFTs.
It is the world’s first marketplace exclusively for cricket. Considering the prominence of cricket in many Asian countries and the love for the sport in the hearts of people, Cricket Foundation brings them closer.
Giving a deeper sense of belongingness to the people, it creates a community-owned digital ecosystem for cricket. Furthermore, the incentivization model of the platform adds more value. Anyone holding the native token of the platform gets incentivized.
Such applications of NFTs instill a better vision for the future where NFTs, in tandem with Blockchain, create a democratized digital ecosystem free from third-party interventions.
All these facts together make it cloudless that the future of assets is heavily dependent on how the NFT space turns out and the potential of NFTs is dependent entirely on the intellectual developments in this space.