Unique Digital Certificates (NFT): The Technology That Will Change Ownership
Last weekend, fragments of an art installation that became the prototype of the world’s first NFT trophy appeared on the streets of the cities that host Euro 2020. For the first time in the history of world football, there is a digital award that combines physical perception and digital technology, and will be awarded for the best goal in the European Championship. The prototype is based on an art installation by the Russian calligrapher artist Pokras Lampas. The balls appeared near attractions, popular recreation and sports facilities in Amsterdam, Baku, Budapest, Bucharest, Glasgow, Copenhagen, London, Munich, Rome, St. Petersburg and Seville. What are the technologies of non-fungible token (NFT), how they will change our understanding of property and whether it is possible to make money on them – in the next column for our publication writes a columnist for Realnoe Vremya,
Will an investor make money on NFT?
Today I would like to talk about the technology of non-fungible token ( NFT – non-fungible token). Perhaps this abbreviation has already caught your eye in the light of news from the art world, into which blockchain and cryptocurrencies have rapidly burst. Recently, it has become a fashionable trend to create NFT on collages, sold for 70 million dollars at auction, here we mean the work of the artist Beeple, sold at Christie’s. Billionaire Mark Cuban has put up one of his motivational quotes for sale in NFT format at a price of $ 1,700 in cryptocurrency. Elon Musk in March tweeted a statement that he created a song about NFT in the format of such a token and put it up for sale. He was immediately offered an offer – the artist Winckelmann offered $ 69 million, which he raised from the sale of a collection of drawings at Christie’s, and this was the first lot in history to be sold for cryptocurrency. Whether the deal was completed is unknown
So, a non-fungible token. To put it simply, it is a technology that allows you to digitize the interaction with any virtual and physical goods. The key word in this name is “non-fungibility.” That is, the token is unique in its characteristics and cannot be replaced with exactly the same one. But the classic currency is an example of a fungible asset: any ruble is equal to another, the same ruble.
A token, in simpler terms, is a designation of an entity in blockchain-based systems. Thanks to the blockchain, information about all operations is now stored on thousands of computers, that is, absolute decentralization has been achieved – and, as a result, information cannot be destroyed and falsified. The first to use blockchain were cryptocurrencies. All information about all cryptocurrency transactions is stored on multiple machines and updated, so no bank is needed for such a currency. Further – more, with the advent of Ethereum, so-called smart contracts began to be used – a person was no longer required to control execution, this is done by executable machine code. Thus, complex digital asset transactions became possible. Until recently, blockchain services used fungible tokens such as Bitcoin, Litecoin, ether and others. But the understanding came that not all assets are equal and interchangeable, and transferring information about them to the blockchain and making transactions with them using smart contracts would be aerobatics.
This is how the NFT format (non-fungible token) appeared.- a digital certificate that represents a unique object – image, video, audio, and so on. The token contains all information about the product, and it gives the exclusive right to the product. Accordingly, when conducting operations with the token, we perform operations with the product itself. Since tokens are stored in an open and distributed blockchain, information about the product, owner and transaction history will always be available and reliable. In principle, NFT technology allows even physical goods to be tokenized (there are still difficulties, but they are already being solved), and for digital goods it is just perfect. Examples: digital art, game items (weapons, characters), items in virtual universes (earth, for example). Imagine: you have created a certain image in the form of a gif and it has scattered across the web. By attaching an NFT token to it,
How to create a token yourself
You can create a unique token and associate your asset (art, collectibles, things, content) with it independently and for free on specialized cryptocurrency services. In fact, you will get your hands on a digital equivalent of a certificate of ownership, confirming the uniqueness of your copyright.
According to experts, in the future we will see tokenization in the NFT format and other unique objects: real estate, vehicles, up to personal identification. That is, the token will be tied to a person in order to identify legal documents, personal data, and more. There will be no need for intermediaries in transactions who are guarantors for both parties. Now the authenticity of documents and identity can be verified using the NFT token. This, of course, is still difficult to fit in the head, but for our children and grandchildren it will be in the order of things. Digitalization is in full swing.
The financial industry will be happy to accept this format, for example, to tag bearer shares that do not have the owner’s first and last name, they are easy to steal and misappropriate. In addition, the implementation of the NFT will dramatically reduce the costs of national depositories for the maintenance of registers.
It should be noted that technology is just beginning its march and the world of art, as the most loyal sphere for new methods of self-expression, gladly accepted it. Experts believe that the penetration of technology into other areas will occur in the next 10-15 years.
Index platforms and tokenized set shares
As for a private investor, there is an opportunity to make a little money on arbitration – to acquire digital art objects and resell them later at a profit. You can also consider buying a general NFT index to profit from rate differences. Let’s see where and what can be done. There are two kinds of projects: NFT index platforms and NFT set tokenized shares.
- NFTX is a platform for creating index funds backed by NFT. Tokens of one type of assets and tokens of a combined fund are offered for purchase;
- NFT20 is a decentralized exchange for NFTs created by NFT development studio Very Nifty. On the platform, collectors can make a deposit to a certain NFT pool without approval, receiving another NFT in return, or ERC-20 tokens confirming their shares in this pool.
- B20 – a token from the Metapurse team, is a basket of NFT tokens dedicated to the work of the artist Beeple, which was mentioned at the very beginning. B20 allows you to become a co-owner of this basket, which includes more than 20 NFT Beeples 1 to 1, as well as other valuable NFTs;
- Whale is a project of Whal Shark, a successful NFT collector, a social currency based on a number of rare and valuable NFTs stored in The Vault;
- NIFTEX is not the fractionated NFT sets / collections themselves, but a protocol for fractioning single high value NFTs or larger NFT sets / collections. There are a lot of interesting things on this exchange.
Tokenized shares of the NFT set.
Both types of projects can be purchased on the Uniswap and SushiSwap platforms.
In conclusion, I would like to note that this technology opens up new horizons in the digital world, adding uniqueness to any digital works, giving them market value. We live at the moment of the birth of a full-fledged digital world, and it is even difficult to imagine what the world of the future of our, for example, great-grandchildren will be like. It will be interesting to watch the further spread of the NFT format.
Published By : realnoevremya