Since the introduction of non-fungible tokens (NFTs) in 2014, there has been a huge amount of hype and misinformation, especially since the market as a whole has exceeded $ 24 billion. You can’t open the news feed without popping up an article about non-fungible tokens. These are inevitably obligatory “NFTThe paragraph is for newcomers … and for readers who have consumed 12 similar articles but still haven’t got it. If you are in the latter, you are in the right place.
NFTs can be really important and useful, and NFTs are evolving to become more and more important. But NFT evangelists and skeptics alike tend to make fun of things, hype, and sometimes make mistakes. Here are some of the claims you may have read about NFTs — pros and cons:
- NFT is a scam.
- You can convert the art to an NFT so that it will not be copied.
- NFTs are just a fad.
- Each NFT proves the authenticity of a “unique” item.
- NFTs are bad for the environment.
First, no — NFTs are not a scam. Scammers use email, but do not say that email is a scam. Second, no — NFTs aren’t fashionable, but it turns out that certain lines of digital collectibles are a permanent set of cultural artifacts or a short-term feverish dream of techno social group thinking. I still don’t know if I will. Third, some current blockchains have problems with energy consumption, but for now, those who care about this may not know who is talking about what.And finally, beware of those who say you can Turn art into NFT Or, the NFT may interfere with your copy of the art, or prove that the work of art is genuine “unparalleled”. This language was invented by those who know how to manipulate the perceptions of the masses, and none of it is true.
Related: Entry into NFTs: Understanding the Environmental Impact of Digital Collectibles
Is NFT a digital asset? Yes. An asset is a digital asset if people are willing to buy it, because the definition of an asset is “what is considered worthwhile”. Like the decision of an art collector to buy a painting of Monet, or Maurizio Cattelan’s “banana” Fixed to the wall with duct tape (Cool for $ 120,000) — The willingness to buy something does not have to be based on any kind of objective reality.
In other words. When art collectors buy a rotten banana duct taped to the wall, they know it’s a banana duct taped to the wall. Therefore, when buying a digital banana that is virtually duct taped to a public blockchain by an NFT, it’s best to have a clear understanding of what you’re doing and what you’re not doing.
This is usually the point where you will read about everything Non-fundability.. Boiled down the jargon, NFTs are just a record of something. Ownership claims, time-stamped transaction receipts, agreements. Just as only the owner of the seat 24A ticket for a sporting event agrees to sit there, the NFT agrees that it is not universally exchangeable. And I agree that there are no (or should be) duplicate records that make the same claim about the same thing. That’s all about being “uncontrollable.”
Value of NFT
The key to understanding NFTs is how they become valuable. Unlike cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), NFTs usually get their value from claims for things that are not controlled by the blockchain itself: digital image files, certificates to the house, To the club dedicated to the admission pass. Therefore, NFT owners need to work on the sparse relationship between the blockchain ownership record and what appears to be ownership that is not on the blockchain.
Consider this: Would you like to buy an NFT just for itself, without a reference to digital or real-world assets? It is a record on the blockchain that contains only a unique string of data. Not interested? What if you say it was unique, Beyonce once owned it, or someone else is lining up to buy it sooner?
What do you own when you “own” an NFT? Almost all legal statements of ownership include the concept of ownership and control of something. If the NFT is used as a ticket for a 24A seat, you own the agreed right to sit in that seat. No one else can sit there, and if someone tries, you can shake them your ticket and tell them to eavesdrop.
For NFTs that represent digital works of art, things are tricky. In this case, the NFT usually contains a link to a public media file on the Internet. Anyone can access and copy this file. Forgery is difficult, at least in physical art. But in the world of 1s and 0s, it’s easy to make a perfect replica. Therefore, in this case, you can only own and control the transaction receipt itself. Only you can convince someone else to pay you to write your ID in the owner field of the NFT record. But what is its value? In many cases, you cannot own or control the art. You can’t prevent someone from copying it. You can’t prevent them from doing something you or the artist doesn’t want, such as writing a nasty word above. And you can’t even prevent them from creating another NFT record, directing it to the same art, and claiming the same ownership. yours NFT is made.
Many digital collectable traders claim that it doesn’t matter that they don’t own or control the work of art, which is a real asset. They suggest that this lack of control over people who make copies and spread them throughout the Internet is a benefit to NFT owners. Let’s clarify this. People who freely promote someone’s work may benefit, but the massive uncontrolled diversion, sneaky, and unauthorized commercial exploitation of the intellectual efforts of others is clearly not. ..
NFT evangelists have recently community And use NFTs as access paths to all sorts of online and hands-on experiences. This ranges from exclusive clubs to virtual concerts in the Metaverse, creators, other enthusiasts and chat rooms where you can interact with celebrities. There is nothing wrong with this. NFTs may be a complex and costly way to manage tickets at the moment, but they are a legal and potentially useful way to do that, especially as they become cheaper and easier to use. NFTs can truly address issues such as ticket forgery and scalping.
Related: NFTs and Social Capital: How Projects Work Together for Sector-Wide Mutual Benefits
Evolution of NFT
NFTs are evolving. Much more than was possible with the advent of new NFT standards such as Ethereum’s new EIP-4910, a compatible extension of the ERC-721 standard that forms the backbone of most NFTs as of 2022. You can start a strong claim, claiming to grant enforceable ownership and control by the NFT’s smart contract itself.
To see how it works, let’s turn the example of a ticket for a sporting event upside down. If instead of buying an NFT for a 24A seat, the NFT has expressed an agreement that only you can offer that seat to others, not just for a particular game, but for all games over time. What happens? As long as sales are only permitted through cryptocurrency transactions, NFT smart contracts can give owners exclusive control over the receipt of payments in exchange for having people sit in their seats. And here, the seat owner does not have to be a stadium or league. In this scenario, the stadium franchises each seat and uses NFT’s smart contracts not only for NFT owners to get paid from each person sitting at 24A, but also at the venue, league and possibly players. You can even get it received. Its income reduction. This is license management and is a reasonably wise use case for NFTs.
That is the point. NFTs can represent rights, the rights of artists, and support their enforcement. Collector’s rights. The right to distribute, resell, and collect royalties. And if all these money transactions are managed on the same blockchain as the NFT itself, this low digital transaction receipt and the smart contracts that manage it will have the real power to change the economy of art. An entertainment industry for beginners that undertakes operational efficiency.
connection:Empower female creators with NFTs and cryptography
Today, technologies such as zero-knowledge encryption are combined with new smart contracts such as those based on EIP-4910 to add scalability, privacy, and capabilities for developers to build useful services.
Using NFTs in this way lays the groundwork for artists to register their fans as promoters and distributors and give them skins for the game to make a more reliable and consistent livelihood. Franchise, If you do. Instead of persuading people to buy NFTs later to make more money, people can buy NFTs as the right to create and distribute approved reprints. This represents the right to reprint and distribute by itself. From 10 first-generation digital prints, artists and their collectors, influencers and promoters can receive passive royalty income from over 11,000 digital prints and the revenue they collect. Owning such an NFT gives the owner real, enforceable ownership.
The new NFT standard also makes it possible to do all of this entirely on the blockchain, without relying on third-party marketplace exchanges or centralized services. Imagine being able to copy a simple embed code from an NFT to your own gallery website. As with YouTube videos, you can sell your videos there (even works of art) without relying on YouTube to serve them. , Concert pass, or big game ticket) without using other platforms.
After all, the exaggerations used to describe NFTs are understandable, and as they evolve, there are many of the same. It’s part of the story you’re buying. And nowadays, whether it’s a new Tesla, a picture of a can of soup, or a digital banana. NFT tape On the wall of the blockchain, you are buying a story.So maybe hype merchants do one thing right While making mistakes in everything else.. Believing in society can be a source of great value.After all, if we can convince you NFTs are just digital receipts recorded on public internet bulletin boards. — And it’s not a useful tool for improving the financial life of creators while growing a more inclusive and enthusiastic digital community — how much do you mind paying for one?
This article does not contain any investment advice or recommendations. All investment and transaction movements carry risks and readers need to do their own research when making decisions.
The views, ideas and opinions expressed herein are for the author only and do not necessarily reflect or express the views or opinions of Cointelegraph.
John Woru Pert Co-founder of TreeTrunk.io, a company of ConsenSysMesh. TreeTrunk is the first company to implement the EIP-4910 NFT smart contract, distributing royalties on the chain while protecting digital originals under zero-knowledge encryption. Wolpert also co-chairs a baseline protocol standardization body that uses zero-knowledge encryption and blockchain technology to improve information security for multi-party IT workflows.