Non-fungible tokens have unique attributes, because they are usually associated with a specific asset. They can be used to prove ownership of different properties, from game skins, right down to ownership of physical assets. Other classical tokens are interchangeable, like coins or banknotes. Money tokens are identical, they have the same attributes and value during exchange. There is a wide range of applications of Non-Fungible Tokens (NFT).
- Trading of rare items in video games. A player spent 300 hours receiving a very rare artifact in a game, but after receiving the item he or she realizes that it could not be traded or exchanged. Therefore, the time spent on its acquisition is lost. To avoid this, special tokens are needed to turn a valuable good in the game into a unique disposable asset that can be exchanged or sold on a special blockchain platform. NFT is not interchangeable because there is only one token in the world.
- Tokenization and trading works of art. A famous musician can make a new album and sell each album at a certain price. Two million albums can be created and sold through auctions. When the number of copies expires, the price of the remaining copies may increase. Thus, goods and ownership do not leave the Internet. NFT represents ownership of digital art and allows the creator to save and record his or her copyright. NFT, and therefore art can be bought and sold in the same way as physical works.
- New opportunities for auctions. NFT can be used at auctions. Invariability and irrevocability of both bids and the auction itself will be secured by a blockchain.
- Tokenization of physical assets and transparency of papers. NFT adds the potential for creating security tokens, tokenization both of digital and real resources. Physical assets, such as property, may be marked out by them for partial or joint ownership. If these security tokens are not interchangeable, then asset ownership is fully monitored. Moreover NFT can be used in documents. For example, qualification, software licensing, birth and death certificates. A smart contract for the NFT confirms the identity of the recipient or owner and can be stored in a digital wallet for easy access and authentication.
According to Forbes journal, the mass introduction of blockchain technology will occur in an interval of 4-7 years.
The Benefits at a Glance
- Tokenization and Selling of art
- Fractional ownership and investments at art
- Non-Custodial Login
- Reusable KYC data
- Auction. Invariability and irrevocability of both bid and auction itself
- Trading items from games