The future of NFTs goes well beyond JPEGs. These use cases are just a starting point.
You are probably sick of hearing about NFTs at this point. Perhaps you’ve heard of celebrities like Paris Hilton and Tony Hawk joining in on this crypto world of art or the astronomically high prices people are paying for cartoon monkeys and pixelated images.
There is certainly a lot of hype around NFTs, and people are quite rightly questioning why others are so obsessed about what seems to be just a JPEG. But NFTs are really much more than that, so let’s dive into the tech and get to understand what this phenomenon is all about.
Just so we’re on the same page, let’s start by defining what an NFT is exactly.
NFT stands for non-fungible token
Okay, and? Non-fungible tokens are uniquely numbered tokens that can be “minted” as one of a kind on a blockchain.
An NFT token has metadata encoded permanently on the blockchain in a format that is “non-fungible,” meaning it can’t be changed. Often it includes a URI (uniform resource identifier) which is comparable to a URL. That URI points to a unique JPEG, a piece of art that is the visual representation of this token. The token cannot be duplicated or recreated “on-chain” anywhere; there is only one. It can be transferred between people, but the actual ownership of an NFT can only be one “wallet.”
When purchasing NFTs, people are buying the piece of art–the JPEG–but, more importantly, they are buying the token as the certificate of authenticity. “On-chain” you can trace back all of its owners to the creator. This is what most people–the “right click save as…” crowd–fail to understand.
NFTs are so much more than art
While NFTs are clearly great for artists and creators everywhere, there are actually so many more things NFTs can, and will, be used for.
The original spec for NFTs actually called them deeds or certificates, and that helps clarify the underlying technology.
Because NFTs represents something that is one of a kind, they are essentially just another validation of ownership that can be attached to many different things, for example:
Certifications. I recently completed a build space workshop, and when I completed it, they sent me an NFT signifying that I had successfully completed that course–something like an actual, physical certification or diploma. This NFT sits in my wallet and is unique to me. I will not be surprised if this becomes commonplace.
Memberships. One of the reasons Justin Bieber, Jimmy Fallon, Steph Curry, etc., are buying these monkey pictures is because they represent being part of an exclusive club. The Bored Ape Yacht Club has members-only parties and hosts exclusive members-only online forums. Other membership-driven clubs are popping up quickly as well. Like LinksDAO, which is creating an NFT holders-only country club.
Metaverse goods. What gets the gamers most excited is cross-game NFTs or in-game items that you are able to transfer from one game to another. Items in games such as special weapons, clothing, etc., usually are stuck in that game. With games increasingly plugging into blockchains, these all of a sudden become increasingly portable across games. Big things are happening in this area with Nike buying RTFKT and Adidas selling NFTs in anticipation of gamers being able to transfer even their digital shoes across games.
Event ticketing. Tickets for concerts and sporting events are a great way to think of the future of NFTs. A ticket by nature is a physical asset that represents a single unique seat. An NFT could just as easily represent that unique single seat and beyond that, be completely secure and controlled by the original owner. This would make the reseller market controlled by individuals instead of scammers and big “middleman” companies being able to make a killing.
Real estate. Thinking more abstractly about the future, if you currently own your home, the actual representation of ownership of that home and land is a piece of paper with your name on it sitting in a county filing cabinet somewhere. This could very similarly be represented by NFTs. In fact, I wouldn’t be surprised if, in 15 to 20 years, property rights–at least in some countries–go “on chain,” and become represented as NFTs. Digital property is being sold in the metaverse, so it’s not a big jump to bridge this into the physical world as it becomes more commonplace and understood.
A good way to conceptualize NFTs, if you’re still struggling, is to simplify it and remember that an NFT is essentially a digital representation of one-of-a-kind-ness.
There’s definitely a learning and adoption curve with NFTs, mostly because we are so used to being able to physically grasp or touch something to understand ownership of it. But the concept of being able to own something digital is not that much of a leap considering the money and stocks you might own are mostly digitally represented at this point. The records of your diplomas and certificates are held in a database somewhere.
NFTs are bringing the concept of ownership more online and making that ownership more accessible and transparent than ever before. It’s no longer just in someone’s database; it’s “on chain.” If we look at the trends, ownership becoming more digitally managed is inevitable and has real utility. While it’s easy to discount the cartoon monkeys/cats/penguins, the concepts and technologies that they are playing with will have a big impact and utility. Groundbreaking technology usually gets adopted by gamers first, and this is no exception.
Original Article :
https://www.inc.com/inc-masters/nfts-beyond-the-jpeg.html
Author: TONY SCHERBA,
