NFT meaning and definition.
NFT stands for Non-Fungible Tokens and is a unique, non-interchangeable token created on a blockchain platform and used to authenticate the ownership of digital assets.
NFTs provide reliable, immutable ownership records, allowing buyers and sellers to see important aspects such as:
- Who created an NFT
- When an NFT was created
- Who own an NFT
- Who bought an NFT
- The transaction history
- The prices history
When did NFTs appear and when did they become popular?
Although Ethereum blockchain was the first to popularize NFT globally, the technology itself goes back to the first years of Bitcoin (BTC). In 2012, the concept was shaped by the eToro CEO's blog and the BitcoinTalk forum.
By the way, many people believe that the very first NFT in the world were "CryptoPunks", the first was actually a painting called "Quantum," created by Kevin McCoy in collaboration with programmer Anil Dash on May 5, 2014 Sold this NFT on June 10, 2021 at Sotheby's Natively Digital auction for $1.47 million.
The year 2021 generally marked a boom in the NFT market. Total sales reached $17.6 billion, 200 times more than the year before. The number of customers was also growing - 2.3 million in 2021 compared to 75,000 in 2020.
How do NFTs work?
The first non-fungible tokens (NFTs) were created using the ERC-721 protocol, which differs from ERC-20 tokens such as BNB or SHIB ("fungible" tokens). Since the creation of ERC-721, the list of such protocols has expanded significantly, so now many blockchains already have their own standards on which to build NFTs.
For example, in the Everscale network, on which Grandbazar is based, this standard is called "tip-4".
The difference is that unlike "fungible" tokens, which are divisible and non-unique, each non-fungible token is completely unique and not divided into parts.
For instance, fiat currencies like the dollar are fungible: A $1 bill in New York City has the same value as a $1 bill in Miami. A fungible token can also be a cryptocurrency like Bitcoin: 1 BTC is worth 1 BTC, no matter where it is issued.
Non-fungible assets, on the other hand, are unique and non-divisible. They should be considered as a type of deed or a type of ownership of a unique, non-replicable item. For example, a flight ticket is non-fungible because there cannot be another of the same kind due to its specific data. A house, a boat or a car are non-fungible physical assets because they are one-of-a-kind.
Because each NFT is stored on a blockchain, there is an immutable record starting with the token’s creation and including every sale.
The impact of NFT technology.
NFT is a revolution or, better said, an evolution of digital assets and property in a technologically dependent world.
But what is the real impact of NFT on the areas we are already familiar with? Let's explore:
NFTs provide many opportunities for global industries like consumer goods, sports, retail to change the way they engage with their customers, enhance the value of their existing products, tap into new markets, and come up with new business models.
For example, in a field such as logistics, it is important to know the distribution centers, the product owner at different stages of the supply chain and to be able to calculate the approximate speed at which the final recipient receives the product. NFT can be created not only to track the movement of goods, but also to gain real-time visibility and better manage all the processes in the supply chain.
Some logistics companies are already making moves toward supply chain tokenization, with "IBM" being the best example.
This company currently owns more than 400 blockchain projects that are used in the development of smart contracts between owners and carriers that provide cargo visibility from one end of the supply chain to the other for global trading venues in the shipping ecosystem. Such solutions will eliminate the need for human control and therefore eliminate the possibility of any fraud at any stage of the process.
Consumers today want visibility into how the product was created, where it came from, and whether or not sound practices were used in the overall process. NFTs will be the key to providing this transparency to consumers and making it easier for them to make the best decision when making a purchase.
What are NFTs used for?
The list of industries in which NFT is used is growing every day, but let's take a look at the most popular, as well as the most original options.
Many digital artists, tired after years of creating content that generates visits and engagement on Big Tech platforms such as Facebook and Instagram, and getting almost nothing in return, finally have a way to monetize their art. These artists see a future in which NFT will change both their creative process and the way the world values art, as for the first time there is an opportunity to truly "own" and sell digital art.
NFTs have opened new opportunities and business models for artists and musicians. With NFTs created for their digital artwork or music, they can engage and sell directly to their fans without middlemen, such as third-party services or distribution platforms.
Consumer brand engagement and loyalty
NFT also makes it easier for people to get involved in different fan clubs or communities of different brands.
Take, for example, NBA Top Shot, a trading platform where sports fans can buy, sell, and exchange NFT files of NBA videos.
Many musicians have also begun to come up with interesting and new ways to interact with their fans through NFT. For example, American heavy metal band Avenged Sevenfold released "Deathbats Club," a collection of 10,000 NFTs that gives owners access to an exclusive community that provides unique opportunities to interact with the band.
The business industry is also not going to ignore the NFT trend and is actively introducing tokenization of its products for better communication, interaction and consumer engagement. An example of this is the campaign for the launch of the NFT collection by Dolce & Gabbana, which after the successful initial launch of the collection created a community "DGFamily NFT", whose members could purchase a DGFamily Box access card.
The card has different levels of privileges and depending on the "dignity" of the card you get access to one of the three types of token boxes, similar to jewelry boxes and decorated in the spirit of Dolce & Gabbana: expensive and rich. And then you get the opportunity to attend private events in the virtual world, and there will be bonuses, gifts, etc. In other words, the same scheme that works in the real world for VIP clients of luxury brands.
NFTs are the "building blocks" for the metaverse. In the metaverse you can create your own avatar and move around the virtual world, make friends, meet people, attend concerts, play games, buy virtual goods or have real goods delivered. In essence, you will have your own digital identity in the virtual world, based on the uniqueness and uniqueness that NFT technology guarantees.
NFTs have also had a major impact on the gaming market, as users now have the ability to transfer in-game purchases between different games because NFTs are blockchain-based and exist independently of a specific game platform, which means they can be used in other games.
NFT technology has made it easier to digitize almost any item of collectibles.
- Collectibles from the game (weapons, clothes for avatars and other mission accessories).
- Art collectibles (paintings, photos and even memes can now be tokenized and sold in markets).
- Sports collectibles (uniforms and accessories, collectible cards).