Do NFTs and cryptocurrencies confuses you? Do you fail to understand how NFTs create value and if they are of any use to you or not? Don’t worry in today’s article I am doing to tell you how NFTs create value, why is NFTs industry flourishing and why is NFTs a revolution.
Although NFTs exists since 2014 they came became popular after 2017 after the establishment of the first NFTs-based marketplace “CryptoPunks”. Since then hundreds of millions of dollars of trade happened on CryptoPunks and other NFTs marketplaces.
You must be thinking why people pay millions of dollars for just a piece of art that they can download from the internet. Here the main thing is the ownership of the art piece, not the art piece. By owning the NFT they enjoy the ownership rights of the exclusive art piece and that is what excites them.
What are NFTs and how do they work?
NFTs stand for Non-fungible tokens. We can simply define NFTs as” it’s an asset that represents real-world objects like a piece of art, painting or anything”. We can sale and purchase NFTs online. They are unique and distinguished and they represent the ownership of a single person.
We store all the information related to NFTs on a blockchain network same like cryptocurrencies. The information of the Blockchain is spread over thousands all over the globe through distributed ledger which makes it impossible to hack, alter and remove.
Thus the data that is associated with a particular NFT makes it very easy and fast to identify the ownership right and make its transfer extremely easy and secure.
How do NFTs create value?
NFTs create value in numerous ways let’s discuss the most important of them.
1. Impact of the value chain:
Impact on the value chain is the most important factor when talking about how NFTs create value. NFTs have revolutionalized money transfer by eliminating the middle man. With NFTs, you no longer need a middle man or a financial institution for the transfer of wealth
With just a single transaction you will be able to send your money anywhere around the globe. If the person wants to buy an asset he only needs to initiate the request. If the owner accepts the request the ownership will be transferred without the need of any middle man.
2. Intellectual property:
As the popularity of NFTs is increasing, the use cases of NFTs are also increasing. One of them is the intellectual property of physical goods. Storing all the necessary information and detailed product description in the smart contacts on blockchain allow the user to create intellectual property belonging to one person.
3. Gaming industry:
NFTs are very valuable for the gaming community as they are allowing them to trade NFTs-based digital gaming products in exchange for cryptocurrencies.
Moreover, due to the decentralized system, people use NFTs and blockchain in asset management and banking.
With NFTs possibilities are endless. Looking at the multiple use cases of NFTs we can say that NFTs are the next revolution. Not only creators can get benefits from NFTs but people are using them for intellectual property rights, trading, and even now restaurants are using NFTs for table reservations.
5. Value for markers:
As we discussed above the use cases of NFTs are countless, the same as that markers have a great opportunity to get benefit from NFTs. they can use it for people to offer them a personal experience with the high-value products in their portfolio.
How Do NFTs create Value- Conclusion:
NFTs can create value in countless ways. It can not only benefit the artists or creators but other industries can also use NFTs as a revolution in their business model. It offers versatility, and it has a great impact on the value chain as transferring wealth was never this fast and easy.
The gaming industry is also flourishing due to NFTs. It is helping people get intellectual property right even of physical goods. The gaming industry is also flourishing due to NFTs.