The Future of NFTs & A Guide for NFT Beginners
A deep dive into the future use cases of NFTs, current utility in the NFT landscape, and everything you need to know about creating, collecting, and vetting NFTs.
The popularity of Non-fungible tokens (NFTs) has been surging within the crypto-verse since January 2019, especially in the context of gaming and digital art. NFTs are unique assets that can be used for various purposes and are the next generation of blockchain technology. However, for many people, who may have come across the term while looking into cryptocurrencies their usage can appear mysterious.
Crypto Kitties were the standard-bearers of the NFT industry, but the technology is suitable for much more than digital collectibles, such as content gating, loyalty rewards, voting rights, and ownership and verification of physical items.
If you don’t know about NFTs, this article is a great starting point as we’ll discuss NFTs, how to create them on-chain, and their future use cases.
What Are NFTs?
Tokens representing ownership of unique items are known as non-fungible tokens (NFTs). In contrast to fungible tokens like cryptocurrencies, they cannot be traded or exchanged at an equivalent value.
Due to its unique properties, an NFT is non-interchangeable and enables us to tokenize artwork, collectibles, and real estate. Secured by the Ethereum blockchain, an NFT can only belong to one official party at one time, and it is impossible to alter the ownership record or copy/paste a new NFT.
There are several potential applications for NFTs, but currently, NFTs are focused on collectible items, like digital artwork, sports cards, and rare items. Jack Dorsey, Twitter’s founder, tweeted a link to a tokenized version of the first tweet ever written in which he wrote: “just setting up my twttr.” The NFT went for $2.9 million!
Alt Text: Image with gradient purple-black background saying NFT. The word NFT is further connected
Overview of the Utility Behind NFTs
NFTs are subject to numerous misconceptions and misunderstandings. Many believe that NFTs are primarily offered as artwork and can be “right-clicked and saved” since many famous NFTs sold to date are works of art. However, NFTs have many uses outside of art.
The following are four unique uses of NFTs…
One of the primary uses of NFTs is that they can provide access or ownership to unique items. NFTs are non-fungible and traceable via the blockchain, making them a digital, trackable alternative to physical stubs.
One example is that smart contracts and NFTs can be used in combination to set a ticket’s terms & conditions, expiration dates, and any other limitations. As a result, both parties can keep track of their tickets and the data they store on them.
Owning NFTs has many benefits, including their collectibility. Collectors often use NFTs because they are easy to verify and authenticate.
The blockchain tracks NFTs from the moment distribution occurs. You can view token transaction history on the blockchain, including who, when, and where the transaction occurred. Collectors can seamlessly verify the authenticity of an asset this way.
For example, Oasis is a privacy-enabled, scalable, and decentralized layer-1 blockchain network and provides instant finality, low gas fees, and high throughput. They will tokenize their ROSE NFT collection on Emerald, the Oasis Network’s EVM compatible ParaTime. EVM-based apps, such as DeFi, NFTs, and crypto gaming, can easily integrate into Emerald due to their full EVM compatibility.
Alt Text: The image shows a collection of 8 beautiful Rose NFT collectibles of Oasis Network. Each collectible is of different colour, background and design on them
Digital wallets let you store all your coupons in one place, making it easier for you to view them all. Additionally, since these coupons are in digital wallets available to the public, companies that provide them can gain more exposure.
NFT marketplaces also offer you the opportunity to trade and sell your coupons, making coupons both an option to save money and make some money.
Virtual accessories are digital assets accessible in a virtual world called the metaverse, and include things such as user-controlled avatars, NFTs, and events. NFTb is a digital platform specially designed for digital artists, gamers, and music enthusiasts, and its dual launchpad helps projects and creators launch efficiently using NFTs and tokens.
With more people engaging with the metaverse, the demand for different virtual assets will increase. Furthermore, you can use some virtual accessories to unlock a physical product, and they may even be able to access limited-edition drops that aren’t available to the general public.
Problems That NFTs Can Fix
In terms of supply chains, NFTs offer great potential. However, this is not the only case where their use is critical.
NFT and Blockchain technology can make a significant impact on these major markets.
Every day, insurance companies face fraud. Ghost claims are a widespread problem that insurers face, costing the industry $80 billion annually. NFT technology allows us to record claims events, such as car accidents, and prove ownership of insured property.
Intellectual Property & Copyright
It is impossible to doubt the immutability of enterprise NFTs. It is helpful to keep a record when you make something, especially when it comes to IP and copyright. You can also use the application to protect your brand.
NFTb and Oasis partnered because they believe confidential computation technologies can offer transformative benefits to the NFT and intellectual property industries. They empower creators and artists by allowing them to own their content and data, both big and small.
Liquidity of Assets
We can extend the use cases of Blockchain far beyond the financial industry by using an NFT or Non-Fungible Token. You can simplify the process of managing, trading, and owning assets like arts and collectibles with NFTs by doing it digitally. As a result, this increases the value and liquidity of those assets for investors.
The Misrepresentation of NFTs
Many people find it bizarre that these simple images fetch such high prices when anyone can right-click and download them for free. NFT values originals, just as physical art does. But, unlike physical art, blockchain technology allows NFTs to be instantly verified.
The transactions of NFTs on Blockchain are fully transparent and easily traceable. It is possible to access all transaction details, including the exact transaction hash, time of transfer, as well as gas fees.
The issue of cryptocurrency’s energy consumption and its impact on the environment has been in the spotlight lately. The growth of NFTs is only fueling these fires.
In general, NFTs use Ethereum, a blockchain system that relies on proof-of-work to confirm each new block. Thus, all the miners compete to solve a complex problem. The first person to solve it collects a reward with the gas fees associated with each transaction.
As a result, miners are encouraged to invest in more computer power, which draws more power from the electricity grid. Energy derived from sources emitting greenhouse gases harms the environment.
Nevertheless, it’s hard to determine how specific NFTs impact the environment. On the Ethereum blockchain, NFTs account for a small portion of transactions. NFTs are likely to have some impact, but they may not be as great as the widespread adoption of crypto and decentralized finance (DeFi).
Despite the environmental concern and their high prices, not all NFTs sell for hundreds of thousands of dollars. And since NFTs are easy to access, it makes it easy for the average person to enter the art world.
Many people connect NFTs with artwork, but NFTs also serve other purposes.
Axie Infinity, for example, is a Pokémon-inspired game where players can battle, collect, raise, and build a kingdom around their ‘pets’: which are NFTs. These Axies often sell for high prices when the assets are rarer. Besides Axies, everything from land to build, or items to use to advance in the game, are NFTs.
Additionally, such use cases only touch the surface of NFTs. With blockchain’s capability to verify virtually anything, new uses have arisen in areas such as real estate, vaccination certificates, and music.
Innovative & Future Use Cases of NFTs
NFTs have brought artists a whole new world of possibilities. NFTs will only become easier to use and more widespread as time goes on.
Real Estate Title NFTs
In addition to virtual real estate, NFTs are creating opportunities for physical real estate and promoting a brand-new frontier for property ownership, trustless property titles. Traditionally, property transfer and title management were labor-intensive. An NFT connected to a physical property allows easy collateralization and straightforward usage.
Twitter is not an exception to the trend of monetizing digital assets. Twitter co-founder Jack Dorsey sold his first tweet to a Malaysian businessman for $2.9 million, about $100k per character (including whitespace), and the proceeds went to GiveDirectly Africa.
Alt Text: This image shows of a hand holding a mobile phone which reads NFT marketplace, an NFT image, token ID, price and a buy button
The industry of digital art has long faced problems with the provenance of digital art. Non-fungible tokens have solved those issues. Digital proof of ownership and authenticity gives crypto art its value. Even though anyone can see a CryptoPunk on the Ethereum blockchain and download or save it, one can prove that they own the original with the help of a corresponding NFT.
Buying items for an online game is not an original idea. Many games have marketed items, which can be purchased for real money using their interface. They do not have access to the same liquidity as the blockchain because the centralized game server controls these items.
In token-based currencies and NFTs, ownership data is stored on an immutable distributed ledger. So, if a particular game shuts down, players will still have proof of ownership. The play-to-earn model is sometimes called “play-to-own” because it emphasizes the importance of income and ownership.
Game enthusiasts are urging players to try “play-to-earn.” They play games to earn NFT items and sell them on marketplaces for a profit. Jake Browatzke, the founder of the On-Chain Gaming YouTube channel, makes up to $148 in a day from play-to-earn games.
According to Bitcoin.com, play-to-earn games accounted for $25 billion of the $2.3 trillion crypto economy in 2021. In Axie Infinity, for example, gamers can acquire smooth love potions (SLPs) that they can sell for 18 cents each.
NFT-Based Virtual Reality
Decentraland is a virtual reality game that allows users to purchase NFTs that represent ownership of land parcels in a digital world. The ownership of land parcels lets users create their virtual worlds and applications. Users can buy, rent, or sell land at any time.
People buy digital land for a variety of reasons, such as:
- In terms of value, digital real estate is increasing exponentially and appears to be a viable alternative to real estate and art as a store of wealth. Also, the fear of missing out on something great leads people to buy virtual goods.
- The price of land worldwide is sky-high, and real estate is out of reach for many, but virtual land is more affordable and offers the same benefits for a fraction of the cost.
- Virtual lands also open up further possibilities for what can be done with it in the future, such as building art studios, advertising, or just renting it out to others to build on and generate income. Additionally, big retailers are exploring the possibility of opening virtual shops.
What’s Next for NFTs?
NFT applications can offer interesting financial implications. Celebrities are endorsing NFTs, and the trading volume of NFTs has increased three times in just one year, which is a promising sign for the future.
In addition to understanding the mechanics of NFTs, it is also crucial to understand the existing trends and the favorable environment that supports their growth. Non-fungible tokens provide a more convenient way to play, collect and swap digital assets while opening up a new market for digital collectibles.
Furthermore, we will see many projects using NFTs built on the blockchain. As a result of the integration between Oasis and NFTb, metaverse projects built on Oasis will have access to high-quality NFTs and a complete suite of tools. The Oasis Network is the perfect blockchain to mint, trade, and collect NFTs due to its unique advantages. These include 99% gas fees lower than Etheruem (ETH), high throughput, privacy protection, and defence against MEV.
How to Create an NFT On-Chain
The popularity of NFTs is trending these days.
An outline of how to make and sell an NFT follows below:
Choose the asset and Blockchain
Decide which asset to convert into NFTs. Anything digital is acceptable, like art, music, video, memes, etc. To convert assets into NFTs, you need to choose the blockchain technology you want to use.
Set up a digital Wallet
The next step to creating an NFT would be setting up a digital wallet to fund your investment.
Select a Marketplace
The NFT marketplace is like a stock exchange, where you can buy, sell, and trade NFTs. NFTs must be listed on a marketplace. Choosing the right platform for your NFTs is like picking the stock exchange where a company wants to list its shares.
Upload your File
In the NFT marketplace you select, you will find instructions on uploading your digital art to the platform to turn it into a marketable NFT.
Determine Your Selling Strategy
Your NFT can be sold for a fixed price or auctioned. You can set a time limit or leave it open-ended and decide when to end an auction.
The latest update in this space is the integration between Oasis and NFTb, which will give metaverse projects built on Oasis access to high-quality NFTs and a complete suite of tools.