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What’s the relation between the NFT and the Real world?


Art installation
Photo by Robynne Hu on Unsplash

In the digital age, where memes and tweets are the talk of the town and fetch large sums of money, a new player has entered the game - Non-Fungible Tokens, or NFTs for short.

Non-fungible tokens (NFTs) have recently gained immense popularity, captivating the interest of artists, collectors, and musicians alike. These utility tokens have been fetching millions of dollars, leading to debates about their actual value. There are questions surrounding the connection between NFTs and the real world. Are they merely a passing digital fad, or do they possess any tangible worth?

In an integral part of this response, we'll explore the link between NFTs and the physical world, looking at how they work and why they have become so popular.

Let's dive in and find out.

What are NFTs?

NFTs, or Non-Fungible Tokens, are one-of-a-kind digital assets that come with their own identification codes or metadata. The term "non-fungible" indicates they are unique utility tokens that provide proof of ownership or authenticity of a specific digital file or piece of digital work.

Unlike traditional cryptocurrencies like Bitcoin, which are interchangeable between one person and exchangeable for another, NFTs are distinct and cannot be replaced.

NFTs are created using blockchain technology, a decentralized digital ledger that records transactions and ownership information. Each NFT contains a digital signature that verifies its authenticity and uniqueness, making it a valuable collectible item in the digital world. NFTs can be bought, sold, and traded like traditional assets, with their value determined by market demand and supply.

Here arises a question: how does NFT have a link with the real world? These utility tokens are often associated with real-world tangible assets, such as physical artwork and land property.

Origin and Evolutions of NFT

While NFTs have gained widespread attention in the last few years, their origins date back to the early days of blockchain technology.

The concept of utility NFTs first emerged in 2012 with the creation of the Colored Coins protocol. It allowed users to create and trade digital assets on top of the Bitcoin blockchain. However, it was not until the launch of Ethereum in 2015 that NFTs began to take off.

Etheria was the first development, or, more precisely, a breakthrough project, of NFT technology connected with the Ethereum blockchain.

In 2018, the first major NFT artwork sale occurred when CryptoKitties creator Dapper Labs launched the CryptoPunks project. CryptoPunks were 10,000 unique 8-bit-style characters, each with its own set of attributes. It became a cult phenomenon among blockchain enthusiasts in no time.

The utility NFTs further expanded into more areas of entertainment. For instance, NFT gaming got the hype with more wallets like Enjin. This allowed developers to explore and excel in the NFT world.

In 2021, the NFT market continued to grow, with new use cases and applications of emerging technology. Some notable new developments included using NFTs to represent real-world assets, such as luxury goods and real estate. Moreover, digital artists, celebrities, and brands joined the market and minted their own NFTs. Many collections came into existence with high prices to diversify the market. One of the most profound examples is the Bored Ape Yacht Club, which offered people a personalized experience.

Nowadays, these utility tokens are getting into social media platforms due to their extreme hype and growing value. Metaverse has embraced the technology open-armed to benefit creators and users alike.

Digital and physical world
Photo by Federico Beccari on Unsplash

NFT and Real World

NFTs, or non-fungible tokens, are now a popular way to represent ownership of digital assets on the blockchain, such as art and music. However, the potential of utility NFTs goes beyond the digital asset realm, as they can also be used to represent ownership of real-world assets. Some of the prominently used cases of NFTs are as follows:

1. Digital Art: NFTs Revolutionizing the Art World

Digital art has long been difficult to monetize, as it is easily replicable and shareable online. Fortunately, NFTs provide a way to create scarcity and value for digital art by creating a unique, one-of-a-kind token that represents ownership of digital artwork.

With the help of NFT marketplaces, such as OpenSea and Nifty Gateway, these utility tokens have emerged to facilitate the buying and selling of utility NFT-based digital art. Some digital art pieces have sold for millions, including the famous Beeple artwork "Everydays: The First 5000 Days," which sold for a staggering $69 million at Christie's auction house.

2. Collectibles: Authenticating Rare and Valuable Items

NFTs, or non-fungible tokens, have revolutionized how we think about collectibles by offering unique digital assets.

NFT collectibles can take many forms, including digital trading cards, virtual pets, artwork and unique virtual items in video games. For instance, Cryptokitty was the first online collectible, a unique digital kitten that people used to create more unique identities with added value in crypto world.

3. License and Certifications: Verifying the Credibility and Ownership

NFTs are not just limited to the realm of digital art and collectibles but also making waves in the world of licensing and certification. They offer a secure and tamper-proof way to verify qualifications and ownership.

In the past, physical documents like licenses and certifications were vulnerable to forgery and tampering, leading to credibility issues. However, NFTs provide a game-changing solution by creating a digital record that combats manipulation.

For example, the University of Bahrain has issued blockchain-based digital diplomas using utility NFTs. This allows graduates to securely and easily prove their qualifications to potential employers without the risk of counterfeit documents.

4. Real Estate: Using NFTs to Represent Physical Assets

Real estate is another industry where NFTs find innovative use cases. NFTs can now represent ownership or a fraction of a property, providing a secure and transparent way to transfer property rights.

For instance, a property developer in New York sold a luxury apartment building using utility NFTs. Hence, each token represents a fraction of the property's ownership. It allowed investors to purchase a piece of the building without the hassle of traditional real estate transactions.

The Future of NFTs

The future of NFTs looks promising, with more industries and companies adopting blockchain technology. This prevailing familiarity with NFTs and their potential could lead to more widespread use cases and new opportunities for artists, musicians, and creators to monetize their work.

Moreover, improved storage and trade of these unique identities in digital wallet will lead to faster transaction times, lower fees, and increased security for digital wallet.

While a few high-profile artists and creators largely dominate the current NFT market, we could see greater diversity in the future. This could lead to new voices and perspectives being heard and valued by the nft community, artist, creators and community. As a result, a positive development for the industry is expected.

There is also a sheer prediction that utility NFTs will become environmentally sustainable with increased user experience. On the other hand, people seem to experiment with these utility tokens way beyond their limits and expectations.

Overall, a community will thrive and provide many opportunities for creators community members to make their best contributions.

Ready to Accelerate Your Brand Using NFTs? Join Etcheve

Are you eager to showcase your unique digital assets and unlock the real-world potential of utility NFTs? Perhaps you're seeking a platform to help you turn your nft projects or your business into a thriving success story. If this sounds like you, then Etcheve may be the answer to the nft platform of your dreams.

With a diverse art community of like-minded people, Web 3.0 can help you generate passive income and provide a network of creators and artists to share ideas with. Moreover, you can launch your best art collectibles here with utmost ease and pleasure.

So what's holding you back? Join Etcheve today and explore the path to NFT success.

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