Know NFT Opportunities and Challenges 2022

Photo by Andrey Metelev on Unsplash

Indeed, businesses always find ways to always develop along with the many technologies that can determine the business model until digitalization occurs.

Starting from financial products, communication, supply chain, property, to art. It all started from the presence of blockchain technology, its subsidiary products, to NFT which is now increasingly popular.

Maybe you’ve learned about blockchain, bitcoin, and cryptocurrency. However, make sure you don’t miss getting acquainted with NFT. So, what if I want to get to know more about the opportunities and challenges of using NFT?

You are on the right page! Let’s start with the first question.

What is NFT?

Okay. Let’s, deep dive!

Quoting from the official IBM website, NFT or Non-Fungible Token is an asset that is ‘considered’ exchangeable for an item that is identical to each other. These assets are digital assets that represent items or objects that are in the real world, ranging from works of art, visual games, to videos. They can be traded online using cryptocurrencies. And they are generally coded with software similar to other crypto assets. “Fungible” makes NFT different from cryptocurrency, for example, 1 bitcoin can be exchanged for an object that has a value of 1 bitcoin. Meanwhile, like a device, each non-fungible has a certain code, features, and specifications that make it more unique. With NFT, transactions made have a limited transaction process and have a unique identification code, NFT also serves as proof of ownership of an item.

Then, let’s find out more about NFT by moving on to the next question.

How Does NFT Work?

In particular, NFT can be stored on the Ethereum blockchain, but it is possible on other blockchains. Therefore NFT is part of the blockchain. There will be no NFT ownership that can cancel it after the transaction process is complete, so it can only be held by the buyer.

The process of buying and selling NFT must go through the NFT minting process. The minting process is not the same as buying, the minting process on NFT means creating something completely new, you can print or convert an existing item. The NFT minting process requires a third party or marketplace such as OpenSea, Mintable, and MakersPlace. While buying, it takes existing items that have been printed into NFT.

Finally, we come to the last question.

What are the Opportunities and Challenges with NFT?

First thing first, who are you?

H-human?

Right!

But, sorry. You have to be able to choose as an artist or a buyer, or maybe both.

As an Artist!

Welcome, you are in a better position to sell more of your work with NFT. Your work has even greater potential to have high value and fame. This is supported by the NFT feature which will pay a percentage of each NFT sold or changing ownership.

As a Buyer!

Apart from being a form of support to the artist, the buyer gets the right to own or use a purchased artwork, and of course, it is supported by blockchain entries. By buying work with NFT, of course, the ‘profit’ becomes something to consider, if you hope that one day the value will increase, and you want to sell it, of course, you can get ‘a profit’. Keep in mind that NFT can work as a speculative asset like any other, according to the official Forbes website because the NFT market is still quite new, buying and selling and investing with NFT is quite risky.

It’s End

Hopefully, it can add to your insight about NFT, both how NFT works to the opportunities and challenges of using NFT. It is still difficult to know whether NFT has the potential to be used more widely in the future, of course, there are still many challenges ahead that must be overcome, given the many technologies that are rapidly developing side by side.

References: IBM | Forbes

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Novita Wulandari

Novita Wulandari

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