What’s the Deal with NFTs?
So by now, most people are familiar with NFTs, or they’ve at least heard of it. Let’s focus on the what instead of the how for this article, plenty of people have defined the tech and you programming aficionados didn’t come to me for the details on that because I’m not a developer.
But I can explain to you what they are doing that is creating all of this hype. So, let’s break it down simply into three tiers.
- Art
- Function
- Ownership
Art
In its simplest form, the NFT adds art to the blockchain. This has created the most buzz and brought NFTs to the mainstream. Art has a very niche community, most people appreciate art in one form or another.
As a social construct, it’s existed throughout the ages in many forms, to display social status, attract mates, and to just express one’s own self-identity when simple words are not enough.
The addition of art to the blockchain has created another platform for artists and consumers of art. This is especially important in these uncertain times when people have been home-bound during pandemics, wars, or any other life-changing event that may require them to make a living in a virtual world.
NFTs allow an artist to control and release their art. Some artists, like Beeple, have made headlines selling art for millions of dollars, others have created entire communities around profile picture avatars like the Bored Ape Yacht Club, and some of these have gathered the attention of large corporate brands who have also tried to get a slice of the NFT pie and it’s billions of dollars it’s generated. But not everyone is in it for the art, which brings us to …
Function
If you think NFTs as an art form is no big deal maybe you are looking for a real purpose or utility as we call it. I myself got into the cryptocurrency markets to achieve financial independence. I’m not an expert on art, I can enjoy it, but I don’t pretend to understand it. So I follow utility projects.
Outside of your traditional markets and by this I mean the likes of Binance, Coinbase, and Gemini just to name a few centralized exchanges, exists an entire world of Decentralized Finance.
Automated Market Makers and exchanges like Uniswap, Sushiswap, and Pancakeswap, have created an entirely new set of markets. One not controlled by big banks, or governments but instead by code. Defi, as it’s called, is my favorite aspect of cryptocurrency/blockchain.
You can provide liquidity, earn crypto on fees, make loans, trades, be your own bank essentially. What does this have to do with NFTs?
NFTs are made out of the same juicy goodness that makes up other smart contracts. Behind that picture you see on the screen when viewing an NFT could be an entire world of code enacting transactions, locking up liquidity, like Sync Network Cryptobonds for example.
It is the opinion of this author, that this will be the future of NFTs. When it catches on that NFTs are made up of so much more than pixels.
It’s not just defi, creative minds and talented programmers are using NFTs for game pieces, private membership passes, event tickets, so much more. It’s just a matter of time before people realize they can have real estate titles, car titles, mortgages, and everything else in the form of an NFT, making transactions easier and services such as abstracting obsolete because the blockchain will be immutable. Which leads us into…
Ownership
This is pretty simple and straightforward. Webster defines Consensus as follows consensus: [noun] general agreement: unanimity. The judgment arrived at by most of those concerned. Blockchain provides consensus.
Setting up your wallet, taking possession of your assets, allows you to enter the ledger and you can prove with the consensus the assets in that wallet are yours. Now it’s going to take some time for everyone to get on board with this as personal accountability is not something most people are fond of having.
But in the future and with better education and as technology and security improve, it may be a reality that you have all of your assets at your fingertips.
Conclusion
Non-fungible tokens in a nutshell are Art, Utility, and Ownership. There is something in these unique tokens for everyone. If you like how I break things down follow me on Twitter, and here at HackerNoon for new articles, whenever I feel like it!
-Cointoro