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NFTs could change the way we own things

June 29, 2020

Blockchain technology is largely linked to the exchange of digital assets, from payment systems such as Zcash (ZEC) and Libra to platforms such as Ethereum and substrates using so-called fungible tokens. An article that is unnecessary is interchangeable with another identical article. Your dollar bill and my dollar bill, your Bitcoin (BTC) and my Bitcoin are worth the same amount.

However, Non-Expendable Tokens (NFT) are not the same value as other tokens or currencies, not even those that look similar. While this feature may seem impractical, especially given the commercial use of tokens, it is highly desirable if the goal is to protect the value of an asset. For this reason, non-consumable tokens have revolutionized the ownership of symbolized art and intellectual property.

The history of fungible and non-fungible tokens

To fully understand the difference between fungible and non-fungible tokens and the role each token type plays in the blockchain ecosystem, you need to understand fungibility and non-fungibility first.

NFTs could change the way we own thingsNFTs could change the way we own things

Consumable tokens are by far the most popular tokens currently available on the blockchainThink of Bitcoin or Litecoin (LTC). While these tokens often have to be adjusted for price fluctuations, they can often be exchanged for other consumable tokens at the same price at which they were purchased. This not only makes consumption tokens more convenient for trading, but also enables the high level of liquidity in the cryptocurrency markets.

Non-fungible tokens are a completely different animal. Although they can be bought and sold with consumer brands, they are their own asset class. Identification information is embedded in their smart contracts, which makes each non-consumable token completely unique. This uniqueness makes unusable tokens unsuitable for most stereotyped crypto trading purposes. However, they are ideal for registering and storing ownership of digital items such as collectibles, games, and even art.

Digital representation of real objects

While NFTs are digital assets, there have been interesting steps to link them to real physical objects. With Unisocks, for example, you can buy a SOCKS token (consumable) that you can then redeem for a pair of real socks and an NFT that owns that pair of socks. Holy glory It has a similar configuration with its tokens Fame and ICK, that you can redeem for a physical shirt or mask. There were 12 real impressions of the characters in CryptoPunks and they were placed in a sealed envelope in a Zurich art gallery and on the back was a paper wallet.

If it all seems hollow to you, Keep in mind that traditional auction houses like Sotheby’s and Christie’s, which control up to 80% of the art secondary market, have started to explore blockchain-based solutions. Sotheby’s has announced that it will use blockchain technology to retain ownership of the artwork. While this is the least optimistic about cryptocurrencies, there are no plans to accept it. In 2018 Christie’s used Artory blockchain recorder, founded by a former Sotheby’s employee, to make and record the sale of a private art collection that sold for $ 323 million.

It is interesting that blockchain-based art could eliminate the need for these companies. Because the chain of origin and ownership history can be checked publicly, only someone who has the private key can transfer the art. As with many of these projects, a digital and real solution must coexist for a while.

What the NFTs have achieved most successfully is to demonstrate the possibilities of turning an image, a sound, a fraction of a video or even a game piece into a TNF. Opening the doors to the revolution in intellectual property in this burgeoning digital age.

Existing models related to the creation, possession and resale of art rarely benefit the artist. Imagine that you create and sell a painting for $ 900 just to have the buyer resell for $ 85,000 15 years later without getting any of those profits – the creator.

This is exactly what happened to the painter and graphic artist. Robert Rauschenberg. It originated in the United States, where there are no federal resale rights, but even in the few states and countries where it does, the sale must meet certain criteria for you to be eligible. Instead, imagine tagging your art and adding a smart contract that ensures that a certain percentage of every sale is sent to the original address. This way, you can pay royalties in your country of residence, the size of the sale, or your age at the time of sale. This setup could be a game changer for artists who often only see the return on the original sale.

More than just a profit

The crypto space is known to speculators, people who want to get rich quickly instead of investing in building a permanent ecosystem. This cannot be said for many projects in the NFT area that were specifically developed for a long-term vision. OpenLaw has helped create an end-to-end real estate transaction with NFTs to represent the property, which could eliminate the tedious and costly process of title verification in countries like the United States.

0xcert evidencespace, a product that enables the issuance (and verification) of NFT-based academic certificates, It is a hopeful solution for fake credentials. This is a major problem as research has shown that more than half of the people who claim to have a PhD are likely to lie. GenoBank’s current goal is to enable people to fully own their DNA (often you lose these rights if you send your data to companies like 23andMe who can sell your data to drug companies), which means that you can either can sell or donate. at will for product development and scientific research.

NTFs are the future of property

With the increasing popularity of NFTs in the cryptocurrency and technology industry in general, they have started to attract investors and generate projects in other areas such as retail, sports, and even politics. Last year alone, Nike applied for a patent to label shoes at Ethereum. Formula 1 held an NFT auction of a Formula 1 car brand. and Brooklyn Nets NBA player Spencer Diwiddie tried to terminate his contract so that fans could participate in his success, although the NBA prevented him from doing so. The current coronavirus pandemic has continued discussion about whether blockchain technology can be used for secure and virtual voting in the United States – an event that could lead to NFTs entering the political arena.

With the digital world, NFTs provide a very viable solution to tokenize property. These tokens can properly digitize and store real assets while keeping them safe. This ultimately revolutionizes deletion, storage, legality, and security of property.

The views and opinions expressed here are solely those of the author and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.

Trinity of Montoya She is a protocol engineer at Bison Trails, a leading provider of blockchain infrastructure. She has been a software engineer for seven years and has worked exclusively in startups in New York City and Boston. Born in New York, she currently lives in Colorado with her monster dog Zapp.