NFT's

Blockchain technology continues to have a huge effect on human life. The effect can be seen in the applications and solutions that it continues to produce. The non-fungible token (NFT) is one of these, a fascinating approach with a wide variety of applications in our everyday lives.

But what exactly are they? What separates them, and, more importantly, what are some of their applications?

Token

Crypto tokens are digital representations of value that have been stored on a blockchain. However, they should not be confused with cryptocurrencies, which are digital payment methods.

Fungibility

Fungibility is an easy term to describe, considering its lengthy name. It refers to the opportunity to exchange a good or a product for one of a similar nature. We have two types of tokens based on this definition:

• Fungible token

• Non-fungible token

Fungible token

Fungible tokens may be exchanged for other fungible tokens. One Bitcoin, for example, can be exchanged for another, just like one Ethereum coin can be exchanged for another; the same is true for all other cryptocurrencies.

In addition to interchangeability, fungible tokens are identical and divisible, and their value remains constant regardless of division. Two 0.5BTC or even four 0.25BTC are equivalent to one BTC. Their subdivision has no effect on their worth. Finally, they run on the Ethereum blockchain using the ERC-20 standard.

Non-fungible token

Non-fungible tokens, on the other hand, cannot be traded for other tokens. Every NFT has a unique digital hash that separates it from all other available tokens. For example, an NFT for a $10,000 piece of art is not the same as another NFT for the same sum issued for a vehicle. Given the fact that they have the same numerical value, they are completely different.

NFTs are indivisible due to their one-of-a-kind nature; they come in whole. Furthermore, they meet the Ethereum block's ERC-721 and ERC-1155 norms.

NFT's use case

• Real state

NFTs are a perfect match because their properties are inherently special. Their tokenization allows anyone to digitally represent their property on the blockchain, enabling anyone to securitize their properties. This technique aids in proving ownership, thus reducing fraudulent activity in the industry.

Additionally, data tokenization automates the selling and transition of real estate. All transactions are carried out by the embedded smart contracts, which remove the need for in-person transactions. As a result, property acquisition has become more effective.

The property sector's liquidity is once again improved by linking it to NFT. Many would-be buyers conclude that luxury assets are out of their price range, but securitization allows for fractional ownership, which caters to medium- and low-income investors.

• Identity verification

As our transactions become more digitised, the need to protect our identities grows. Identity theft is a huge problem across the world, with individuality as diverse as humanity. As a consequence, tokenizing all identities is feasible.

Everyone gets a special digital identity thanks to NFTs. The ID will be immutable and incorruptible since it will operate on the blockchain, preventing identity theft. The NFT also removes the need for physical identification cards.

• Document digitization

The falsification of qualifications, both academic and otherwise, is related to identity fraud. Tokenizing a person's academic and professional accomplishments in order to detect and punish cheats.

Tokenization of records results in record streamlining in addition to detecting cheaters. It does away with the need for paper records, making data transfers and storage simpler. Instead of issuing a physical deed for a piece of land they own, they could obtain an NFT (a digital record) that contains all of the necessary details. Data in digital form is much more portable and stable than data in paper form.

• Art authentication

Any artist wishes to be appreciated for their work, but this isn't always the case. Advances in technology have brought in a slew of imitators who prey on other people's inventiveness.

Imitation and illicit art sales deprive artists of profits while also tarnishing their reputations. An NFT comes in handy in these cases. It not only establishes ownership, but it also verifies the authenticity of any artwork.

The NFT also provides for the addition of additional details to a piece of art in anyone's hands. Previous owners are listed, as well as a smart contract that allows the creator to receive a portion of the resell fees if the job changes hands.

• Ticketing events

Managing ticket sales is a problem for event organisers, with the secondary market being the main issue. Profiteers dominate the market, buying tickets in bulk for resale on the black market at exorbitant costs.

There's also the problem of counterfeiting to deal with. As a result, many true fans chose to stop attending events. Furthermore, the profiteers who run the black market abuse many customers, resulting in brand disillusionment and a decline in sales.

NFTs tend to mitigate these issues because their digital existence allows them to be locked to a single wallet, preventing further transfers. Even if the NFT allows for ticket resale, the ticket issuer should have a smart contract that guarantees them a percentage of the sell-on price.

• Supply chain tracking

Many businesses can face difficulties tracing materials and finished products through the supply chain, particularly when the quantities are high. A specific NFT is allocated to each material/commodity, ensuring a real-time audit of its movement. This prevents losses from pilferage or diversion of goods when in transit.

Conclusion

The rising popularity of blockchain demonstrates its relevance to our life. It has resulted in the creation of solutions that are important in human interactions. Non-fungible tokens are a clear example. These have gained popularity as a result of their potentially infinite applications in our everyday lives. Because of their nature, they're the best bet for collecting unique data on the blockchain. When time goes by, they will be more commonly used in our everyday activities.