NFTs (Non-Fungible Tokens) Are Revolutionizing the Blockchain World

Non-fungible tokens have increased in popularity in the last year. According to non-fungible.com, the total number of NFT transactions in 2020 was $250 million. This is triple the number of transactions compared to the previous year.

The NFT market cap has grown by almost 2000% to date! But what are they and what is the reason for this tremendous surge in popularity?

What Are NFTs?

NFT are tokens with metadata and identification codes that distinguish individual tokens. Unlike regular cryptocurrencies, you cannot trade or exchange NFTs on a like for like basis with each other (making them non-fungible). Cryptographic tokens represent the value of a unique physical item, such as art, and can trace it (provenance).

NFTs operate on a blockchain platform. Regular digital assets are identical, and you can replicate them, but this is not the case for NFT’s. A fungible token like XLM is equal to another XLM and there is no difference between the two tokens.

NFTs mainly use the Ethereum blockchain, which uses the ERC 721 standard. There are also many NFT’s that use the ERC 20 standard. There are other NFTs being developed on other blockchains, but these are few and far between.

Why NFTs?

NFT tokens are used so that they can mitigate fraud and copyright theft. NFTs have been a real game-changer, as their use case goes far beyond artworks and music. You can use NFTs to represent property rights, certificates, and even people’s identities.

It has been theorised that in the future, they will be relevant in voting and could end election fraud. One of the main advantages of blockchain is that you can cut intermediaries out of the equation. This allows artists and musicians to connect directly with the target audience using NFTs.

NFT mania started during the COVID-19 pandemic. Artists and people in the entertainment industry are on the frontline embracing the NFT technology. Knowing that NFT can help them in authenticating their ownership, it becomes easier for them to monetize their work. More so, smart contracts protect them and help them secure their work against theft.

What is the Buzz with NFTs?

NFTs cannot operate outside the blockchain ecosystem. Blockchain ensures the transactions are secure. There is also an open ledger of records for every transaction once you create metadata. All the records of specific NFTs appear in the blockchain. This can help to trace the owner of the assets.

This has meant that people can buy artwork using a digital marketplace. There are many different auction houses that now sell NFTs, a famous one being Christie’s Auction House. Digital platforms such as OpenSea and Rarible are NFT marketplaces.

They have helped to onboard artists and the entertainment scene into blockchain technology. And NFTs have catapulted blockchain into the public consciousness and helped increase crypto adoption.

There is no doubt that NFT will increase the number of users on the blockchain. This will roll out to every industry. Everyone will be thinking about how they can use blockchain to solve their problems using NFTs and other blockchain innovations.

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