Blockchain technology is best known for its use in cryptocurrencies such as Bitcoin and Ether. Users can transfer value directly across bitcoin and Ethereum networks, bypassing middlemen. The non-homogeneous token (NFT) is the latest development in this field. NFT represents something unique, such as digital art, virtual game items, rare collectibles, or other digital or physical assets.
The characteristic of a homogeneous asset such as the dollar is that each asset is indistinguishable and interchangeable. Unlike non-homogeneous assets such as NFTS, each NFT represents ownership of a specific asset and is therefore unique. Ownership of assets is verified and tracked through a public blockchain network, where users can verify the authenticity of each NFT and trace its source. Therefore, NFT is most accurately defined as "a security certificate issued by an originator" that uses encryption to prove the NFT holder's ownership of an official version of an asset.
NFT has many advantages, such as the ability for artists to monetize their digital art; Creating verifiable game items in the game; Create a new digital collection ecology; NFT can also be flexible, using blockchain networks to track ownership of all kinds of digital and physical assets. The application scenarios for NFT are expanding. The following describes common application scenarios:
Digital art
One of the most well-known uses of NFT is for artists to represent ownership of their digital art with a token, which can greatly increase the marketability of art. Today, online art markets are centralized and opaque, and platforms extract a lot of value from them. Creators must pay huge fees to have their work listed on the platform, and can only blindly trust the platform to display and distribute their work fairly. With NFT, artists can easily sell their digital art and earn income from selling NFT on the secondary market, which is a sustainable economic model.
Game items
NFT is the foundation of blockchain gaming, tokenizing, tracking, and transferring unique game items without hosting them. Publishers of traditional online games are often centralized entities that have complete control over the publishing, ownership and properties of the game's items, which often determine the value of the characters and the outcome of the game. If the publisher of the game goes out of business, so will the game items that gamers have spent countless hours collecting.
Digital collectibles
As with physical collectibles such as ball cards and stamps, collectors of digital collectibles collect electronic items they value as a show of support for a company, brand or game. Physical collections take time to transport and cost to maintain. NFT, by contrast, has no such limitations because collectibles are completely electronic, can be transferred in seconds and never depreciated.
Through the assets
NFT can be used to represent not only digital asset ownership, but also a range of off-chain assets such as real estate, government documents, certificates, and degrees. Token representation of real world assets can greatly improve the efficiency of ownership transfer and provide an authoritative source of facts to verify personal qualifications and the authenticity of assets.
While the use of NFT to represent real-world assets is still in its early stages of exploration, it has huge potential for applications such as issuing real estate tokens backed by rents; Issue digital certificates without corresponding physical files. And turning records such as academic qualifications and intellectual property into tokens to enable transparency and automatic execution of transactions on the chain. These NFT use cases are just a starting point to show how a user can use blockchain technology to prove ownership of an asset, and anyone can verify ownership.