Some experts say that we are in a new gold rush with the emergence of blockchain technology. People are spending more time online and are increasingly receptive of digital goods and vendors. The emergence of NFTs has given rise to countless possibilities for B2B transactions.
These days, organizations are adopting new technology in order to prosper. To keep things going, you have to catch up. A great reminder is that the foundation of the blockchain is that the information recorded in the blockchain cannot be altered. While still retaining the anonymity of the participants in the transaction, the blockchain saves the entire transaction history.
Imagine that you have an opportunity to get rid of the risk of losing important information and automate some processes. The world relies on financial institutions. Trust is at the heart of financial transactions. Thanks to the blockchain, we can remove intermediaries and store information with millions of computers around the world to serve as a guarantee.
It is essentially impossible to alter information recorded on the blockchain. Thus, ownership, commercial contract, or patent for a product can be assigned for life.
The NFT and the Blockchain
COVID-19 has made us more digital. People are spending more time online and are increasingly receptive of digital goods and vendors.
The emergence of smart contracts has given rise to countless possibilities on the blockchain. A smart contract is a self-executing program stored on a blockchain that runs when predetermined terms and conditions are met. Thanks to NFTs, it has become easier to create effective business processes that are possibly faster and easier without the use of an intermediary.
An NFT (non-fungible token) is essentially a smart contract and data on the blockchain that conveys ownership of something. The property the NFT represents can be online or offline. For example, it can be art, music, a deed, an actual business contract, an item in a video game, virtual land in a video game (or metaverse), or physical real estate. NFTs have other use cases. See part 2, part 3 and part 4.
You do not obtain the right to own the real artwork when you purchase a digitalized replica of physical artwork; instead, you receive a unique digital asset (the token). The blockchain keeps track of who has ever possessed this token.
The token is dubbed non-fungible because it cannot be replaced with another of the same type, unlike digital currencies, which are issued in huge quantities in the same denomination and may be swapped for each other. NFT, on the other hand, can be purchased or sold in any currency.
NFTs can make B2B transactions more efficient. With NFTs, a smart contract can represent an automated and self-contained set of rules that cannot be missed.
NFT Royalties
Many artists die poor. They often see the paintings that they originally sold sell for thousands of dollars more. NFTs can solve this problem by issuing the artists a percentage fee for every resale of their works (in the form of an NFT). This means that if the artist sells an NFT at $10,000 with a 5% royalty fee (encoded in the smart contract), when the work is resold at $50,000, the artist gets an extra $2,500.
NFT Virtual Land Ownership
Recently, NFTs are being sold as virtual land parcels and are also being traded between users on the NFT marketplace. People can now own a piece of virtual land in the interconnected virtual world without having to bother with owning any actual physical assets.
NFT Privacy
It also provides incredible privacy. You may confirm your ownership of the virtual land by referencing the address stored into the NFT itself—without having to divulge your private information. The property can be rented, resold, or used for special occasions. The possibilities are vast.
Conclusion
The rapid growth of NFTs is accompanied by events in the world. People realise that they need valuable things far more than cash. In the next part, we will discuss why NFT is a big deal and what awaits them.
This series is brought to you by our sponsors:
