Wednesday, February 21, 2024 | Sha'ban 10, 1445 H
clear sky
weather
OMAN
20°C / 20°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

NFT can change the concept of ownership the way we know it

minus
plus

Non-fungible tokens (NFTs) were the most hyped blockchain trend in 2021, and although the volumes have decreased significantly, there is still so much more that has not been explored.


NFT may be used to represent unique digital assets, like the original CryptoKitties and the virtual buildings in the famous metaverse Decentraland. NFTs can be used to proof ownership of any digital item, such as in-game skins, all the way up to physical properties in the real world.


Non-fungible tokens can be used for digital assets that must be distinguished from one another in order to demonstrate their value, or their scarcity. This means non-fungible tokens, or NFTs, can be used to define a unique object, whether it is in the real world or in a digital form. In simple words, an NFT is just a contract with a unique ID.


That ID on the blockchain is made of a long string of numbers and letters, which in turn can be wrapped around the content of the contract. That could be a picture, or a property title... and anything in between.


NFTs are digital representations of assets, and they have been likened to digital passports, as each token contains a unique, non-transferable identity that differentiates it from other tokens.


The unique data in an NFT makes it easier to check and validate ownership and the transfer of a token among owners. Just like cryptocurrency, NFTs also include ownership details to easily identify and transfer tokens among owners.


NFTs may only have one owner at any given time, and NFTs use of blockchain technology makes it easier to prove ownership and transfer tokens between owners.


NFTs means ownership of assets has transferred to the actual purchaser, and as a consequence they can be bought and sold on a game platform, with additional value applied - or discount - depending on who has owned them down the road.


Because NFTs have value set mostly by the market and its demand, they can be bought and sold like other physical types of artwork on digital marketplaces.


Non-fungible tokens (NFTs) are attractive because they are verifiable about their uniqueness and ownership. They can be used in applications developed by a web3 start-up, and can easily be traded via secondary markets.


Unlike standard coins on Bitcoins blockchain, NFTs are unique and cannot be traded as such (hence, they are not fungible). Whereas a Bitcoin is directly exchangeable with another, meaning that it is fungible, NFTs are conversely, as the underlying assets are somehow unique and cannot be traded like-for-like.


An NFT basically allows its purchaser to claim to own an original copy of the digital file, just as one can claim the original copy of a work of physical art, or the master files for a musical recording.


Ownership of NFT assets may differ depending on the deal, but the Nyan Cat example is a common scenario where the artist who created the piece still owns the piece, but the NFT purchaser owns the original copy and the right to expand on it, as if it was a design covered by a trademark.


Although art NFT made the headlines on the news in the past, future use cases might be significantly more interconnected in our day to day life.


SHARE ARTICLE
arrow up
home icon