25 Mar What are NFTs? What is the future of NFT?
What are NFTs? What is the future of NFTs?
NFTs are non-fungible tokens. Being non-fungible means that each token is unique, unlike say Bitcoins, where every coin is fungible, meaning that it is a copy of the other tokens secured by the same blockchain. Until recently, the concept of non-fungible items was unheard of. In theory, the internet is a giant copy machine, and anything that existed on it could be copied endless amounts of times.
However, the security provided by the blockchain makes it possible to create a token that is unique from all other tokens in the same blockchain. Most NFTs are created on the Ethereum blockchain. However, it is still possible to create NFTs on other blockchains. In essence, NFTs make digital scarcity possible.
The Future of NFTs
While some believe that NFTs are a fad that will soon fade, some believe NFTs are here to stay. Here are our top five predictions for the future of NFTs:
- Democratizing Art
One of the use cases that will become common in the future is the democratisation of art. For instance, it will make it possible for even small creators to earn royalties from their art without having the backing of a large organisations. Democratization will give small creators increased independence and freedom since they can create their own revenue streams. They will no longer have to self-censure over fears that the centralized platform that they rely on to publish their material may deem their content unworthy.
- Legal Clarity
Another arising topic will be legal clarity for the sector. Until now, there have been little to no legal consequences for those who steal the digital art of others and use it to sell their NFTs. However, as the sector develops, and interest grows, laws will be created, which will offer legal clarity to this rapidly growing sector.
- Backing Real-World Creations
Another future use case will be that NFTs will be used to back real-world creations. Until now, most use cases for NFTs have been to back digital art. In future, we see this concept evolve where real-world physical art pieces will exist as NFTs. It could also be used to back music and video creations. Doing so will ensure artists can earn royalties seamlessly and retain ownership.
- NFTs Go Mainstream
Until now, the NFT sector has been mainly a fringe industry, even within the crypto and blockchain world. However, that could change in the future, and NFTs could go mainstream. They could become ubiquitous, just like trading cards are an accepted technology by many people not just early adopters but the masses. One development that could help to ensure that NFTs go mainstream is the metaverse. As metaverses become common, NFTs will offer an easy, and cheap means of proving ownership within cyberspace.
While the first wave of NFTs were based mainly on FOMO, and without any real use cases, the future will be quite different. It could be a future where NFTs have real utility and offer benefits for their creators and holders alike providing real ownership.