Crypto Education
NFT’s as Prize Bonds ?
An in depth article explaining the concept of using NFTs as digital Prize Bonds
Introduction
Struggling to get your head around NFT’s? Are terminology such as fungibility, tokenization and images of pixelated zombies a cause of frustration? Don’t let the name ‘Non-Fungible Token’ confuse you. At Mycelium Network we think of them as a digital cryptographic guarantee. The origin of this guarantee can be self verified serving as a means of validating authenticity.
Once you are sure that something is authentic, then you can begin to trust the other criteria it represents. Some companies are using this technology to authenticate physical objects. More commonly it is used to transfer ownership of digital art. In our case you can be certain that each NFT Prize Bond minted is a guarantee of redemption of the asset it represents.
What is a Prize Bond?
A traditional bond is a piece of paper, certifying ownership or rights to claim something for example stock in a company. It may also represent ownership of physical property or a deposit of funds. Governments, corporations and traditional financial institutions have often issued them as a guarantee that the owner can claim what is represented.
“Why isn’t there a metal briefcase full of bearer-bonds handcuffed to your drinking arm?!” ~Malory Archer
Bonds, like vouchers, are a certified means of redemption and have represented all manner of goods through the years. From the right to redeem beer to State issued butter vouchers many uses have arisen. All forms have represented a guarantee from the issuer that a person has claim to whatever is represented by the bond or voucher either immediately or after a set date. Some expire, others have no fixed date for redemption.
As with traditional bonds, the NFT is a certificate. It represents ownership rights or the right of redemption. One improvement that NFT’s offer over their paper counterparts is that they cannot be counterfeited. There is no way the information hard coded within them can be tampered with. NFT’s are easily authenticated, with a little bit of learning, as you can confirm who issued or ‘minted’ them. This information is recorded in a public ledger of account, the blockchain network. NFT’s can be transferred from one digital wallet to another forever retaining a record of origin that the current or prospective owner can confirm.
Imagine an NFT as a box. The value of the box depends on what’s in it. If you put something that has abstract value into the box, for example a few lines of code that allow you to view a digital art file hosted on a server, the box has no intrinsic value. Many of you reading this may be aware of certain fads of art NFT’s. Collectibles whose fluctuating price is subject to the enthusiasm of the moment and fades away as people lose interest.
NFT’s can also be certificates which represent things of intrinsic value. This is an area where huge potential for growth lies with NFT’s and where we at Mycelium Network have planted our flag.
Tokens are created by the issuer (a financial institute, a company, DAO or other entity) through a mechanism known as ‘minting’. Minting describes the process of creating the digital certificate aka token and storing the record of its creation in the public network. This process often involves the recipients participation to start the action of creation. Once minted the NFT acts as a secure digital proof of ownership and authenticity.
Conclusion
In the future many forms of ownership are proposed for this technology. For example forms of certification which require information that cannot be counterfeited or altered such as safety certification. There will be many challenges, such as developing a method to re-issue your safe working at heights permit if you lose access to your digital wallet. With many minds dedicated to building the next progressions of this technology these too will be overcome.
The ability to leverage and combine multiple forms of secure technologies in a decentralised network has opened a realm of possibilities. Possibilities that many are embracing to create value for others. Mycelium Network have leveraged this technology and the advances made in the realm of decentralised finance to create the worlds first global decentralised Prize Bond system.
We are excited about what has been developed by Mycelium Network. We look forward to learning and growing as participants in the ever developing Web 3 space and continuing to add value as we do. While fads come and go NFT technology is a trend that is here to stay and we look forward to setting more trends of our own.
When exploring the world of NFT’s always do your own research, don’t be afraid to question things. There are no stupid questions, only foolish answers.
We hope you enjoyed this article and found it insightful! To learn more about the inspiration behind the art of My-Chance Prize Bond NFT’s you can visit our website here or follow our activity on social media.
Visit our documentation and find out more about the MyNet ethos and our first steps to support organisations aimed at solving crucial issues that our world faces today.
Website: https://my-net.io/
MyFinance: https://my-finance.app/
MyChance: https://my-chance.io/
