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April 6, 2022

The Major Shift Toward Non-Fungible Tokens & What To Expect Moving Forward

Non-Fungible Tokens (NFTs) have become synonymous with Web3, the same way tokens and coins did with the blockchain. 


You’ve heard of Coinbase, Twitter, Facebook.


Each of these megacorporations and a variety of other platforms building NFT integrations & marketplaces on top of their well-known features. 


This phenomenon is overt and we will discuss the shift of attention to these decentralised and entirely unique tokens on the blockchain. 


Where are NFTs heading?


Twitter, one of the largest social networks, has very recently pushed a revolutionary feature – NFT profile pictures that act as verification of ownership. Similar platforms like Facebook are also working on such goals using even more advanced systems. However, the right question to ask about NFTs is how can ownership of a unique digital object be verified? It all comes down to the inner workings of the blockchain. 


Much like cryptocurrencies sit on a blockchain network and have transactions and a lot more data stored on a public ledger which anyone can access through block explorers like Etherscan, so do NFTs, but instead of being released in large portions of the same token, they are entirely unique and cannot be traded for each other with equal value. You can think of cryptocurrencies as a means of payment, and NFTs as one of a kind document like a song or an art piece. 


Numerous innovations have allowed ‘attaching’ media files to blockchain addresses which enabled them to exist on the same public ledger coins live on. Anyone can create NFTs because of today’s available marketplaces and minting solutions, while although it is possible to create cryptocurrencies yourself, that process is far more complex whereas NFT creation can be both lucrative and simple. 


NFTs & Blockchain Innovation:


With great ideas floating around in NFT ecosystems, it is also easy to forget their applications in the physical world, that’s why it has taken quite some time for people to start making NFT representations of real-world objects, tokenising them and making them available on new kinds of online decentralised marketplaces. 


Real-world assets: real estate, documentation, item inventory implementation on the blockchain, are just some of the use cases for NFT technology that would be useful both in life as well as on-chain. 


Most of the innovation and activity that is taking place is in systems that are entirely digital. To be even more specific, most interaction can be seen at the world’s largest NFT marketplaces like OpenSea and Rarible which have been the first to build and introduce every DeFi enthusiast to their platforms, although even before that, online NFT-based games like the famous CryptoKitties have also garnered attention. 


On these large platforms, millions of unique digital assets are getting sold each day, and we are still at the very beginning of this decentralised paradigm. Among those millions of NFTs, lies an incredibly large variety of art forms and styles – we can observe art coming from modernistic sci-fi roots, pictures of people’s hand-drawn paintings, gifs & animations, and even 3D objects. 


Source of images: 


One must only know the very basis of how crypto wallets work and how to connect one to the platform they are on to enjoy minting, buying, and selling NFTs, participating in passionate and engaged communities concurrently. 


There are some concerns:


Despite all this, many people still do not see the value in digital assets as there is currently not much real-world utility that can be used in the system that we live in, meaning that what incentivises people to use NFTs the most is the hopes for their price appreciation over time. 


Thanks in part to shallow marketing and promotional campaigns, the emergence of NFTs featured extreme price fluctuations that made many would-be investors hesitate, perhaps rightfully so.


Similarly there are concerns about the environmental impact of NFTs that arises from the majority of them being minted on the Ethereum blockchain, which currently uses the Proof of Work consensus mechanism and subsequently vast amounts of electricity.


Two sides of the same coin:


Due to these realisations, NFT projects are constantly striving to become legitimate, create real utility and value and garner trust by ensuring they are worthwhile investments of time and money. The potential applications of non-fungible token technology are only now starting to be understood, and the future appears very bright for this space as innovation takes hold. 


We should expect the majority of online popular platforms to adopt cryptocurrencies and NFTs in one way or another: it is just the matter of time. 


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