NFT is perhaps the main trend of 2022. The media space is filled with news about the NFT. For example, the Open sea NFT marketplace was recently valued at $13 billion, a South Korean presidential candidate collects funds for the election campaign using NFTs, etc. Still, a few people understand what it is and how you can make money on it.
NFT (Non-Fungible Token)
A “non-interchangeable” thing means one that cannot be replaced with exactly the same thing. For example, 1 dollar can be replaced by 1 dollar. And Leonardo da Vinci’s Mona Lisa cannot be replaced by anything. Because, no matter how trite it sounds, this piece of art is unique.
A token is a record of entities built on the blockchain. Blockchain, as you know, is a distributed ledger technology. Blockchain makes it possible to decentralize everything. Decentralization is the work of complex systems in accordance with special algorithms that make it possible to guarantee the reliability of the operation in such a decentralized system. It prevents unauthorized modification.
For example, if you trust the bank to store information about your funds or the state, then all information is stored in one place, and it is technically easy to fake it. Blockchain allows you to store all information about all transactions on thousands of computers in such a way that it cannot be destroyed or faked. NFT is just a digital twin of an entity, stored according to the principles of blockchain.
Where Do NFTs “Live”?
Do you know that OpenSea, the most powerful NFT platform, has been competing with Zynga (an online game developer) for a long time? Its founders believed that the NFT market was created primarily for gamers. After all, it was important for gamers to fight with “special” NFT swords, exchange them with other players, or sell them. Zynga did not even imagine that NFT could be applied in some other way. But later it turned out that NFTs can be anything – a picture, a song, a video, and any other digital object. Thanks to a broad view of the application of NFT, the OpenSea marketplace has become number one in the world.
What can be tokenized and in what areas NFT is used:
- digital art;
- sport;
- game items: weapons, skins, characters;
- any items in virtual universes;
- business;
- real estate: proof of ownership.
Tokenization increases the value of any digital product. A digitized asset is independent of the system in which it resides. For example, you drew a picture or made a GIF that went around the Internet. How can you prove that you are the same owner and author?
Thanks to NFT, this is very easy to do. Issue a token for a picture and become its digital owner. Yes, everyone else can still view and download it, but it belongs only to you. As you understand, if you can check the originality of a digital work of art, it is easier to sell it. This is why digital artists were the first to popularize NFTs. In fact, NFT gave them a chance to continue to create and do what they love in the new digital world.
Metaverses (Virtual Universes)
Virtual universes, or metaverses, are virtual worlds that give a sense of presence in space and time, social interaction, as well as the opportunity to take part in the virtual economy.
In fact, what virtual worlds need to be completely happy is blockchain and NFT technologies – they can become the basis for managing property rights in the metaverse.
Everything that belongs to you in the metaverse actually belongs to you in the form of NFTs, be it land, buildings, clothes, etc. And most importantly, you can bring any of your NFTs into the metaverse. For example, you can buy a piece of crypto art and hang it in your home or gallery. Again, show all your awards in innovation forums and testimonials about your expertise.
Metaverses and blockchain technologies are made for each other. What is provided in the real world by physical and legal laws is provided in the digital world by blockchain.
NFTs Need Communities
When buying NFTs, users need to consider several basic factors to assess the potential value. Among them: are the practical application of NFT, rarity, community scale, trading volume, potential, and creators.
The community is one of the decisive factors for the success of the NFT. The size of the community determines the number of potential users and buyers in the open market. The larger the community, the more people will know about a particular NFT. For example, the community of the popular NFT collection Bored Ape Yacht Club (BAYC) is large and active, and due to its size, a lot of people know about the project.
In order to determine the size of the project community, it is enough just to visit the official pages on social networks and estimate the number of subscribers. NFTs with strong community support has clear benefits in the long run. The project has every chance of being successful, demand will grow, and NFT will become more in demand and, therefore, more valuable
NFTs Are For Everyone
NFT is already entering our lives. For example, South Korean presidential candidate Yoon Seok-Yul announced an NFT-based fundraiser. The ruling Democratic candidate in the 2022 presidential election will issue NFTs to people who donate to his campaign. They will receive NFTs as a memento. This is not only a bright election campaign but also a sign that he is going to support digital assets at the state level.
Another piece of news that testifies to NFT’s takeover of our everyday life is from Samsung. The company has unveiled new 2022 smart TV models with “an intuitive built-in platform for finding, buying, and selling digital art.” In addition, with the help of Smart Calibration, the user will be able to adjust the TV settings so that the NFT token is played in accordance with its specifics.
And here is the news of the restaurant business: VCR Group announced the opening of a new restaurant in New York, which not everyone can get into. In order to become a client of an institution called Flyfish Club, you will need to fulfill one condition: to purchase a membership in the NFT format.
We are only at the very beginning of the development of NFT technologies. In the current situation, it is perceived mainly as a way to quickly monetize pictures on NFT exchanges, but further development is much wider and more interesting.
