The mention of NFTs in 2023 undoubtedly conjures up images of highly divisive digital artwork. It’s completely understandable considering how they make up nearly a fifth of the global fine art market. However, there is more to NFTs than absurdly expensive Bored Apes and CryptoPunks. The real value of NFTs is hidden within the name itself. It’s the ‘non-fungible’ nature of these tokens that truly gives them the power to shape our global markets.
A Unique Approach to Ownership
If you swap one Bitcoin for another, or a dollar bill for a different one, there is no real change in what you own. That’s because they are fungible assets. When it comes to resources like these, their individual units are completely interchangeable. With NFTs, however, it’s an entirely different story.
Each NFT is treated as a unique entity by the blockchain where its stored. This distinction not only helps in proving ownership, but also makes it impossible to create counterfeits. Thus, when paired with WebX™ tools like the Pyxis Wallet, NFTs have the ability to provide unparalleled utility.
The Tool of Many Trades
A quick look into the history of NFTs shows us that they were always meant for more than just minting art pieces. The first instance of this technology can be tracked all the way back to the early 2010s, with the invention of colored coins. These were essentially Bitcoins that were modified for non-monetary transactions.
If we study the following uses of these coins, we can clearly see how they evolved into the NFTs of today.
This is perhaps the function of colored coins that most closely resembles the present cultural zeitgeist of NFT collections. Coins were modified to denote ownership of resources such as e-books, songs, trading cards, etc. Transactions of these assets were recorded on the blockchain and unique cryptographic keys were used to identify each rightful owner.
Present day NFTs operate on a similar basis but the categories of collectibles under this umbrella have expanded greatly over the years. Tweets, blogs, memes, and other such pieces of intellectual property can now all be traded over the blockchain.
Joint Ownership Ventures:
Even during the early days of this technology, companies used colored coins to issue shares. This would help with hassle-free distribution, tracking, and payment of dividends. People could leverage the Bitcoin infrastructure to use their shares for voting.
This has come a long way, and now manifests itself in the form of new concepts such as governance tokens. The blockchain makes it easy for multiple people to exercise their respective ownership of an asset. With features such as multi sig wallets, it’s very intuitive for groups to interact with their shared NFT possessions.
Companies would release colored coins to represent their properties, which would be used and transferred as digital keys that signified possession. NFTs expand on this use with added security and functionality.
In 2022, the first NFT purchase of a real-world home took place in Columbia, South Carolina. This historic purchase set the precedent for the real estate industry to delve into blockchains. Since NFTs are essentially an upgraded version of a basic contract, they can be used to buy anything ranging from a plot in the metaverse to a car in the real world.
The technology in this field is constantly evolving to bridge the gap between our physical and digital spaces. Tools such as PyxelChain’s Human Readable Smart Contracts™ will create the sweet spot between safety and accessibility that’s needed for mass adoption of these agreements. Under such a system, the signees will have access to plug-and-play smart contracts that they can easily understand and subsequently fill out without any nuisance.
Looking Past the Obvious
While the economic applications of NFTs are responsible for their rising popularity, the true potential of this invention goes far beyond simple transactions. The non-fungibility of this space lends itself perfectly to the creation of an information repository that cannot be adulterated by any means. NFTs allow us to store and share more than just coins and pictures. They can be used to chronicle entire sections of human history.
Ukraine’s NFT museum stands as a testament to this. They have used blockchains to immortalize the experiences of their people during a time of great historical significance in their country. Narratives may shift over the next couple of decades, but the events of this era will forever remain enshrined in the form of NFTs.
As the technology evolves, people will find more and more uses of NFTs with each passing day. But we must expand our current awareness of the medium in order to reap all its benefits. In the near future, we will be using blockchains to sign our contracts, buy our houses, and handle our data in a safer and more reliable way than ever before. So, we might as well start preparing for that day by learning as much about NFTs as we can right now.