What are NFTs (Non-Fungible Tokens)?

by | Jan 8, 2022 | Cryptocurrency, Cryptocurrency, Metaverse, Technology

By James Allard

NFTs have really blown up over the past two years, but most still don’t really understand what an NFT is and why they could cause a great shift in how society functions. 

Simply put, Non-fungible tokens(NFTs) can be any piece of data with a unique signature attached to it which is then added to a blockchain, such as Ethereum.

This means that while duplication of the audio or video content contained within a  digital asset may still be possible, the duplicate will be identifiable as a duplicate and the original will be identifiable as the original. So, in a nutshell, NFTs allow proof-of-ownership.

They do not secure or prevent piracy. They do not stop someone from selling a duplicate piece of digital art. They are simply pieces of data time-stamped and then added to a blockchain.

Let’s say I buy a piece of digital art directly from the artist himself. The digital art is sold as an NFT, using the artists’ publically known ethereum account. He sends me the NFT via his Metamask wallet.

The piece of digital art is now verifiably the original, and verifiably mine. It doesn’t matter if someone else screenshots the image, they will never be able to prove that they have the original, because they don’t. The one who owns the private key to the blockchain where the NFT is stored, owns the artwork.

Crazy town? Well, kind of, but at the same time genius. It’s crazy because really, who cares who owns what in a digital realm. If one likes a piece of art for what it is, why would one care whether they own the keys to the original file?

As for Jack Dorsey selling his first tweet as an NFT for $2.5 Million, well, that is beyond crazy town and on the way to the asylum.

But, as I said, there is also genius at play here and while we are all hearing of digital art NFTs being sold for crazy prices, real life use cases are beginning to emerge.

 

NFTs and the Supply Chain

According to sdcexec.com:

Non-fungible tokens (NFTs) have the opportunity to completely disrupt the supply chain industry (in a good way) by simply and efficiently eliminating common pain points that result in massive disruptions. 

Now I’d have to argue the ‘in a good way’ statement, but that’s a discussion for another time. NFTs will allow for a greater control system of all goods. This ultimately gives more power to governments and regulators to do what they do best, crush the little man and hand all remains of power not already in the hands of the top 100 corporations over to them.

Not running your business by the Greta Thunberg rule-book? Sorry, your products can no longer be used in manufacturing. Computer says “NO!”.

Any item can have its own unique identity attached to it using an NFT, real-world data such as the items description, origin, colour, weight, responsible party, current location, final destination, life expectancy ect., all of this can be attached to each product at an individual level.

Data could be automatically updated in real-time as items move through the supply chain. By the time a product has reached its final destination, it will have a detailed history of how and where it was produced, and its journey through the supply chain. 

The hype surrounding NFTs use in supply chains took off several years ago, then it quickly vanished, and we have heard very little about it. But the reality of the technology didn’t go away. Developers have been busy building out this technology for the real world.

NFTs will be a major part of the global control grid, automating supply chains from material source, to manufacturing process, to warehouse, to customer. Some refer to this system as the beast system, and once you truly understand the capabilities, this blockchain driven control grid will provide for those at the top, you understand just why it is bing called so.

Nevertheless, there are investment opportunities to be aware of here. While it is inevitable the supply chain will move to such a system, exactly what system will dominate has yet to be decided.

To keep up with the latest surrounding NFTs and blockchain solutions for business and the investment opportunities attached to them, be sure to sign up to our free newsletter.

NFTs and the Metaverse

Some may argue that this isn’t a real-world use case for NFTs, however I’d have to argue that actually, the Metaverse is a very real-world use case. Whether we like it or not, the Metaverse will become a very real part of our everyday lives in what we consider being our real-world.

NFTs in the Metaverse will work in the same way I described for supply chains, but at an even more detailed and manageable level. Because of course the Metaverse is an entirely virtual world, an entirely digital universe; it means every aspect of what is contained within the Metaverse can be assigned a whole range of properties. The most important one for now being, ownership.

Right now there are hundreds if not thousands of virtual universes being built allover the world. These virtual universes are already being divided up and sold to the highest bidder. Virtual clothing, weapons, tools and other such things are also being created and sold to the highest bidder.

At this point, it’s a primitive version of what is soon to follow – hence I refer to it as the Betaverse, but watch and learn because this is a glimpse of what our World is going to be heavily immersed in over the coming years.

NFTs will be a critical part in this, and don’t just take this from me, listen to what Gary Vaynerchuk has to say on NFTs:

NFTs will change how the Wold works, both the digital realms and the physical realms. NFTs will also bridge the link between ownership in the physical realms and the virtual realms being created. 

To dismiss NFTs as a fad is as a big a mistake as ignoring the internet was back in the 1990s and Bitcoin in 2011 was. This isn’t going away, this is only going to expand. 

BUT, as with any new emerging technologies – there will be huge amounts of money to be made and, even larger sums of money to be lost. Be careful out there, it is the wild west.

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