NFT is just the digital collectible on the public blockchain? The physical assets on the enterprise blockchain need it more!
In the world of blockchain, NFT has become one of the hottest topics lately.
Earlier this year, a pair of “NFT socks” was priced at $160,000 on Uniswap, a decentralized finance protocol that is used to exchange cryptocurrencies.
On March 11th, a digital painting, which does not possess any physical form, was sold at nearly 70 million US dollars in the form of NFT at the Christie’s auction. It has become the most expensive digital art of all time. The starting price was only $100.
On March 23rd, Jack Dorsey, CEO of Twitter, sold his first tweet as an NFT for $2.9 million when the bidding ended on the Valuables platform. The tweet, which says, “just setting up my twttr,” was first posted by Dorsey on March 21st, 2006.
On April 5th, China Central Television CCTV-2 channel’s finance broadcast program, “Tian Xia Cai Jing”, has reported regarding NFT with an article title: NFT is the reliable proof for the authenticity and ownership of digital assets.
Then, what is NFT? How to define NFT? What could be the better application for NFT rather than in arts, collectibles and games?
What is NFT？
NFT is known as Non-Fungible Token. The tokens or coins that are commonly known to us are fungible. As an example, there is no difference between each ETH. Each can be interchanged or be divided. The important feature of NFT is that each NFT has a unique identity. Therefore, each NFT is irreplaceable.
Most of the discussions regarding NFT started from the concept of replaceability. A classic example of a fungible asset is currency. A 5-dollar bill will possess the value of $5 no matter what serial number is printed on the bill. However, the bill will become non-fungible if there is extra information that makes the dollar bill unique. For example, the serial number is special; or the bill has a special meaning to you; or the bill was a rare misprint.
The Misunderstood NFT
Usually, in the “introduction” of NFT, the non-interchangeability and inseparability are often the most mentioned characteristics. However, this is only part of the characteristics of NFT.
As a matter of fact, the core feature of NFT is that it can handle multi-dimensional, complex data objects on the blockchain. The distributed ledger records the transaction information that needs consensus. To record information such as “Account-Balance” that are simple and one-dimensional, the fungible tokens will be the matching application. However, if we were to handle data objects with multiple dimensions such as number, text, image, and etc, this is where NFT comes into play.
Recall that at the end of 2017, CryptoKitties, which made the first debut of NFT, designed the NFT approach to store the different attributes of each “Cryptokitty”, so that it became “unique”.
The transactions in encrypted arts and digital collectibles take advantage of the unique feature of NFT. This enables the ability to store image, animation, audio and other complex data as NFT on the Distributed Data Store (DDS). Also, it allows the registration, record-keeping, and transaction on the blockchain. This solves the problems in dealing and exhibiting encrypted arts and digital collectibles. Therefore, the encrypted arts and digital collectibles are often associated with NFT when its mentioned.
Moreover, based on NFT, we could even imagine a Metaverse that everything within it is based on NFT.
Why does enterprise blockchain need NFT too?
Is NFT only applicable on public blockchains? The answer is obviously NO if we could grasp the NFT’s multi-dimensional data characteristics. In fact, enterprise blockchain probably needs NFT more!
The most typical application of enterprise blockchain, such as record-keeping, is to record information on the chain for the consortium participants to view and serve as the basis for mutual trust in business processes. Apparently, there is a lot of room for improvements.
- The record information needs to be stored in a multi-dimensional data structure. Otherwise, it will be stored as flattened data, which is difficult for processing and value mining, similar to paper files being stored in a metal safe.
- Many applications on permissioned blockchains only use blockchains as databases that are hard to use. The record information cannot be reflected on the business value. In other words, it is difficult to digitalize the assets from the distributed ledger system.
But NFT perfectly matches this business requirement.
Based on NFT, we could perform accurate modeling on physical assets to make them unique on the blockchain and achieve asset digitalization and ownership on chain. Furthermore, we could achieve the full life cycle management on assets based on the various NFT transaction types (mint, update, transfer, burn, etc.).
IRITA: Permissioned Blockchain Product that Supports Next-Gen Distributed Business System
The Bianjie team has been thinking and practicing NFT in the blockchain industry for a long time. In 2019, the team began to independently research and develop the NFT function as one of the important functional modules in the permissioned chain products, and participated in many cutting-edge technical contributions in the industry.
In March 2020, Bianjie, the Cosmos and IRISnet Chinese core development team, announced the official launch of IRITA, the 1st enterprise-level open-source permissioned chain product individually developed by the team. One of the most important features is the development of NFT-based asset digitization and modeling function. Based on NFT, IRITA supports the digitization of assets in various fields such as supply chain, intellectual property, healthcare, and record-keeping, and supports the authentication and circulation of assets after digitization.
For example, in the field of supply chain finance, assets such as account receivables and final products can all be modeled as NFTs which can be on-chain and circulated in business scenarios. According to data protection needs, privacy protection and privacy computing can also be implemented for some fields in a targeted manner.
IRITA is the permissioned blockchain implementation of IRISnet and is used to build the first deployed BSN Open Permissioned Chain, Wenchang Chain, which also natively supports NFT function as a result. Uptick, the NFT e-ticketing application that has already been launched on IRISnet, is also planned for a launch on Wenchang Chain within this month.
Interchain NFT
In addition to the applications on the local chain, the Bianjie development team also actively participates in open-source contributions. The team participated in the InterNFT working group led by the Interchain Foundation in 2020 to formulate standards for Interchain NFT. Currently, the team is also leading the design and implementation based on the interchain NFT framework. It will be able to support the NFT’s circulation between various heterogeneous blockchains (including between the permissioned chain and the public chain) based on the Inter-Blockchain Communications (IBC) protocol, and realize the circulation of NFT assets on a larger scale.
Furthermore, in the future, it can be expected that IRISnet would interconnect with IRITA Hub, the consortium interchain service hub, to transfer NFTs on the permissioned chains to the Cosmos ecosystem through the interchain NFT framework. This will bring more potentials for the expansion and scalability of the Internet of Blockchains.
After all, digital art is a niche field. If it can be integrated with the physical industry, supply chain, trade finance, asset management, healthcare and other industries to solve the industry’s pain points and reduce the company’s operating costs, the NFT will play a much more valuable role.
Bianjie’s Viewpoints about Distributed Business Applications
With blockchain as its core technology, the distributed business system is accelerating the realization of human digital migration by featuring efficient support for multilateral business process collaboration and transparent value distribution.
As far as Bianjie considers, the maturity of the distributed business system can be divided into three stages:
- Represented by the record-keeping application, the blockchain is a passive system that provides information verification.
- Represented by distributed applications driven by smart contracts, blockchain is used to support multi-party trustworthy collaboration.
- Represented by NFT+smart contracts, blockchain can support multi-party business process collaboration and can realize efficient value transfer and distribution through asset digitization.
About Bianjie
Bianjie (Bianjie.AI) is a Shanghai-based high-tech startup founded in 2016. By leveraging advanced blockchain and big data technologies, Bianjie is focused on blockchain innovative products and solutions for the financial and healthcare industries. Bianjie is the Core team behind the development of IRISnet — an interchain service hub for next-generation distributed applications, and is also one of the main open-source early contributors of the Cosmos network project. The team recently developed an enterprise product, a consortium blockchain called IRITA, which uses IRISnet iService as well as privacy computing technology. Through IRITA, Bianjie is serving important customers in China, including provincial/state level blockchain platforms, leading Internet healthcare service providers, and a leading insurance service provider.
Bianjie was officially certified as “China National High-Tech Enterprise” in September 2019 and won several national technology awards including the 2018 “Excellent Enterprise Award of China Innovation” & “Entrepreneurship Competition and national championship” in Young Startup Group at CDHIC (China Digital Healthcare Innovation Competition).
