Non-fungible Token: Non- Fungible Tokens (NFTs), a term that is making rounds in the cryptocurrency market since the beginning of 2021.
And now it has become so popular that it has been named as the word of the year 2021 by Collins’s dictionary. But what is a non-fungible token? How does it benefit individuals around the world? Let’s take a quick look at the blog post.
What are Non-Fungible Tokens (NFTs)?
In simpler terms, NFTs are created on a blockchain as cryptographic assets. These assets have unique codes for identification and differentiating them from each other.
However, with NFTs, the value is different. One NFT will never have the same value as another NFT. Also, cryptocurrency can be used for secure digital transactions whereas NFTs can be used to represent assets digitally.
What can NFTs represent and who can use NFTs?</h2
NFTs can represent different assets such as real estate assets, artworks, lending contracts, and more. NFTs can be used by artists for their digital artworks or by real estate agents to uniquely identify the properties, create unique contracts, and more.
What is the importance of NFTs (Benefits)?
The biggest question that most people ask about NFTs is what is its importance or how they can benefit in the long run. Here’s how it can be beneficial
- NFTs completely reinvent the way financial institutions carry out loan and trading systems. With NFTs, each asset such as real estate can be easily represented while providing a loan to the individual or trading the real estate. The financial institutions will be able to create smart contracts for trading and loan systems using NFTs.
- NFTs also help in removing intermediaries and agents. They help connect the seller to the buyer directly. This is especially important for artists who want to sell their digital artworks. They will not need any intermediary to do so. In the real estate market too, the seller can directly get in touch with the buyer by digitally representing the property using NFTs.
- NFTs can also replace physical passports. In physical passports, the identity must be proven at every entry or exit point. With NFTs, every individual will get a unique identity that will be difficult to copy or hack. This makes it easier to streamline the whole identity management process.
- NFTs also increase the value and worth of assets by fractionalizing ownership. Each digital asset represented using NFTs can have multiple owners thus increasing the revenue.
NFTs will completely revolutionize how we operate in the digital world. They will make the transactions, asset representation, and ownership much easier to track. If you haven’t bought any NFT, now is the time to do so.
If you want to keep reading more insight on blockchain, cryptocurrency, and NFT, keep reading our blogs at Coin Informer!