Rapid advancements in science and technology are constantly redefining almost everything where ‘Proof of Ownership’ also has no exception. Artificial Intelligence, Virtual Reality, IoT, Cloud, and Blockchain are a few of today’s ultra-modern and high-end technologies that have completely changed the various conventional perceptions.
By reaching 10M search hits per month, your photo has been taken, fully indexed, monetized, and made a pitstop on the worldwide internet by top search engines. And in return, you do not even make a single penny from all this.
What Are Non-Fungible Tokens or NFTs?
NFTs or Non-Fungible tokens are a sort of digital commodity that can be used to purchase any piece of digital art with its complete ownership rights. NFTs work on the similar technology of blockchain that one of today’s in-demand digital currency Bitcoin and Alt Coins uses.
The core difference between the two is that Bitcoins can be exchanged equally but NFTs are unique and each NFT has its unique value which is why it is impossible to exchange it equally. That makes NFTs one of today’s rapidly evolving modes of digital ownership. It allows people to digitally own any type of digital artwork such as games, videos, songs, albums, paintings, virtual fashion, avatars, etc. without having to worry about ownership rights.
NFTs have rapidly become famous and talk of the internet. The core technology behind these tokens is Blockchain that revolves around crypto keys that are often used for data encryption as well. This technology allows a digital asset to be completely unique in nature and impossible to interchange.
What’s The Real Deal And How This Technology Works?
There are many who do not care at all about this new concept but many believe that it is indeed the future of Proof of Ownership. And that’s the core reason due to which the majority of people interested in these tokens spend a lot of money in acquiring true proof of ownership of any digitally created art piece.
Based on cryptography, NFTs are completely locked by a string of characters or cryptographic hash. The records of the transaction that appears as a result of the purchase, are booked on a digital ledger that cannot be forged. In the beginning, the technology was used to create fungible tokens like Bitcoin and all other cryptocurrencies but now it has reached a new horizon.
This has given an edge to all those who want to have real and secure proof of ownership for their digital artifacts. In this way, they are able to store these objects in the form of highly secure tokens on the blockchain.
What One Gets After Buying These Tokens?
All the discussed details and elaborations were for the artists’ end. Let us now move on to the buyers’ end who is actually spending a huge sum of money. By paying for an NFT, what you get in return is the ultimate right to transfer the purchased token to the digital wallet that you own.
But the real question is still that why do we need all this?
The answer is pretty simple. Just like famous artworks are copied and used or distributed without any huge costs, anyone in the world can have a digital copy of your artwork but you will be able to claim its complete ownership because only you will have the NFT against your artwork.
As a result, the private crypto key that you get is the real proof of ownership of the original object. In addition to that, there is a public crypto key that serves the purpose of a certificate of authenticity for the digital artifact. This set of the artist’s public key and the owner’s private key combined determines the value of any NFT token.
If you are a digital artist then don’t oversee this opportunity of a lifetime to make unimaginable money from your work. Believe it or not but today’s NFTs have no limit when it comes to valuing them. There are a lot of artifacts that have been sold for millions of dollars.
- Jack Dorsey, the founder of Twitter sold his first tweet as NFT for $2.5 million
- 3LAU, an electronic dance musician sold his collection for $11.7 million
- Kings of Leon, a famous music band sold their music album for $2 million
- Musician Grimes sold his work for $6 million
- Nyan Cat, a famous meme animation sold for $600,000
- Beeple’s, a famous U.S. digital artist sold his work for $69.3 million
Some of the other common examples include famous skins and avatars used in games, NBA virtual trading cards, space in Decentraland which is a virtual real estate, a wide range of virtual collectable items, famous video clips, and much more.
Are There Any Challenges?
There are many things that can be taken into consideration while talking about the various challenges in this all-new field. But it is also noticeable that not everything is highly important and needs to be catered to. According to the latest industry insights and reports, the most highlighted issue is the carbon footprint of these digital tokens.
Most of the industry critics and countless people from all around the world have a common question. They emphasize the technology being used for these tokens which is crypto mining. In most of the cases, crypto miners do not use renewable energy as the process involves the consumption of huge quantities of power or electricity.
One of the most recent developments in this regard is the ban that the Chinese government has set in the entire country. According to details, the mining farms were using conventional energy to mine cryptos which not only exceeds the total demand of power required by the respective cities where mining was going on but adds up to a huge chunk of carbon footprint which ultimately increases some percentage of global warming. No matter what the challenges are, the industry is still in its development phase and soon it will become one of the most prominent areas of interest for everyone.
