Does the Future of NFT Lie in Financial NFTs?
The boom of crypto has caused tons of investment options for people. After all, there are over 4,000 types of cryptocurrencies in existence so far in 2021, most of which are either worthless or are bound to fail soon.
However, another investment option has come to light. It is known as the NFT. But one thing has to be made clear: NFTs are not a type of cryptocurrency.
Now, if you do not know much about NFTs, I would recommend you do some in-depth research. By that, I don’t mean, just read comments about NFT on Reddit. To understand what NFT is, according to Forbes, it could be “practically anything provided it is virtual and cannot be touched or handled in a physical sense”.
It could be a digital work of art, digital collectibles, or even a person’s tweet or real estate. The thing that makes NFTs unique is that it is a non-fungible token — therefore, it is one-of-a-kind and cannot be replaced by anything else. They can only have one official owner at a time and they are secured by the Ethereum blockchain.
Does the future of NFT lie in financial NFTs?
Since its boom, these non-fungible tokens have become underutilized, more often than not, lying idle in wallets until they are resold. NFTs, generally speaking, are on their way to mass adoption. However, their perceived value remains disconnected from their practical value.
NFTs describe unique cryptographic tokens which are considered valuable because of their security and scarcity. No two NFTs are the same. Together with the decentralized financial products, NFTs can lead to the creation of unique financial services.
Potential use cases for this sort of technological innovation consists of investments, NTF-backed loans, liquidity mining, or in-game currencies. There are truly unlimited concepts for combining NFTs and decentralized finance (DeFi), much like people discussed the possibilities a few years ago when it came to cryptocurrencies and blockchain use cases. With NFTs, we will just have to wait and see what cool projects will appear soon.