NFT Tokens, the phenomenon & the concept - take a deeper look into the world of NFTs

NFT tokens amounted to the equivalent of USD 2.5 billion. That is 200 times more than the year before.

• What is the NFT phenomenon?
• What are NFTs?
• What are NFTs for?

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The concept of NFTs

First, let's sort out a few things. NFT is an abbreviation for non-fungible token. So what… we can't get rid of it? That's not what it's about. The fungible token embodies money, which is generally fungible, and therefore exchangeable and tradable. For example, each 100 zloty banknote has the same value (okay, you can catch a word here, you can also find something collectible). An example of an object that cannot be exchanged will be an original painting, an example of which is "Mona Lisa '' by Leonardo da Vinci.

So what is NFT? is a type of cryptographic token in the blockchain that represents a unique asset. These can be completely digital assets or tokenized versions of real assets. Since NFTs are not interchangeable, they can function as proof of authenticity and ownership in the digital realm. NFTs confirm, for example, a given file exists only in one copy and that it is original. Of course, you could say, but it's possible for me to make a print screen of some jpg and I already have a copy of it, it doesn't change anything because it's the original one. Similarly to the rest, as in the case of works of art, the aforementioned "Mona Lisa" lived to see a lot of copies, and yet its value did not decrease on this account, and it could even have had the opposite effect.

On the Internet , we can freely copy, transfer and do a lot of other things with files. NFT tokens cannot be copied and can only be sent between cryptocurrency wallets. The NFT tokens we are discussing are mostly based on Ethereum or BNBchain.

The advantages of NFTs

It is worth mentioning the extraordinary advantages of NFT at the beginning. Hence, they are based on the blockchain, which gives us: protection against interference with this data, ownership act, NFT flow history, metadata, public verifiability (everything is stored in the blockchain), decentralization (we do not need to know the supplier of database servers, honesty of the data manager)

As the world transitions from Web 2.0 to Web 3.0, we can see NFT as a building block in terms of:

• Revolutionizing property rights,
• Revolutionizing the exchange of digital assets
• It matters for digital communities, the economy of the metaverse , i.e. for the tradable resources in games.

Where NFTs are most commonly used

But let's now consider what specific applications NFT tokens can have and in which industries they already bring added value. And of course, art comes to mind. NFT tokens have helped to solve long-standing problems related to the uniqueness of digital art. In short, the problem was "how to make virtual graphics unique when you can just copy them", in the real, non-digital world, there are also fakes, but we are usually able to authenticate them. Crypto art derives most of its value from digital verification, which confirms authenticity and ownership.

1. Although anyone can see CryptoPunk on the blockchain Ethereum and download or save the image, only the owner will be able to prove that they own the original. Another interesting example is the launch of the Binance NFT platform, for which the exchange has prepared cooperation with Krzysztof Gonciarz. Gonciarz's work, as the only person from Poland, was put up for auction in the first week after the launch of the platform. Gonciarz created a unique digital work of the NFT type entitled "Fantazmaty", telling the story of the relationship between an online creator and his audience. Nowadays, on the internet , it is no longer possible to be a flesh and blood human being, each time you are just a version of yourself - commented the creator himself. "Fantazmaty" is a work that talks about the process of projecting the image of a contemporary artist, which is an echo of his work. Each viewer creates their own Krzysztof Gonciarz. The work was auctioned for 1.05 ETH.
2. Parallel to art, we have collectible topics, and more precisely, the need for digital collectibles, this use has gone mainstream with NBA NFT trading cards.
3. The third place where NFT is already used is finance, and more precisely its decentralized version, i.e. DeFi.
4. Another place where NFT is applicable are games and the room for maneuver in this sector is huge. If you are from an older generation, it is probably difficult for you to understand how something in the game can reach the value of, for example, tens of thousands of zlotys if, for example, the game is free. Microtransactions and in-game purchases have created a multi-billion dollar industry that can leverage NFT and blockchain technology. So how does NFT improve the gaming world?

• Players get full ownership of their assets. In-game assets can also have real-world value as users can trade their NFT assets.
• Verifiable NFT ownership can allow players to take these assets with them to another game. For example, in the game My Neighbor Alice, game items can be traded both through the in-game market and NFT markets in other blockchains, which significantly increases liquidity

1. Another place where NFT comes into play is in music. Think of it as a digital "first edition" of the record. Including a song in NFT is very similar to graphics, but there are other uses as well. E.g. using blockchain to distribute royalties.
2. The 6th place that comes to mind is real assets that can be digitized, creating tokenized digital versions of these records can move highly illiquid items (such as a house or land) onto the blockchain. In April 2021, Shane Dulgeroff created an NFT representing a property for sale in California. A cryptographic was also attached to the token. The winner of the auction received NFT and ownership of the property. However, the exact legal position of the sale and the rights of the buyer or seller are uncertain.
3. Another place where NFT can be applied is logistics and supply chain issues to ensure that data is authentic and reliable. NFTs also have the added benefit of representing unique items. We can use NFT to track a product, which includes metadata about its origin, journey, and warehouse location. For example:

• Pairs of high-end luxury shoes are made in a factory in Italy. They are credited with NFTs that can be quickly scanned from the packaging.
• Timestamped metadata includes information about when and where the shoes were made.
• As the product moves through the supply chain, the NFT is scanned and new time-stamped metadata is added to it. The data may include the location of warehouses and the time of arrival or departure.
• When the shoes arrive at their destination, the store can scan them and mark them as picked up. The exact history of their journey is available for inspection, so that the authenticity of these shoes can be confirmed.

In conclusion

In general, if we look at NFTs, the revolution may primarily concern the elimination of intermediaries in the world of real estate, art and music. And this can be, above all, huge savings for both the buyer and the seller. When investing in NFT tokens, it should be remembered that simply issuing a given token at astronomical prices will not make this token sell to us. Therefore, before investing, be sure to pay attention to, among others: on market liquidity. In the description of this video, valuable links have been dropped, including the history of the NFT token valuation of the first tweet of the founder of twitter. That's about the balance of this episode. And remember, the world is based on transactions that will not disappear and need to be modernized!