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You’ve probably heard of NFTs. But what exactly are they and where are they headed?
What's happening?
First off, let’s define what an NFT actually is. An NFT, or non-fungible token, is a unique and non-replaceable token which can be traded as an asset and can represent digital or tangible products or services. They are assigned metadata and identification codes when tokenized through a blockchain, which certify and distinguish each token.
All this is to say NFTs are unique assets that are not interchangeable and cannot be substituted for one another, and are tracked on a blockchain. A blockchain is in essence a shared database used as a decentralized and secure way to track information such as transactions. Blockchains are an essential component of cryptocurrencies, and you can read more about the differences between cryptocurrencies and NFTs here.
NFTs were created in 2014 and started gaining popularity in 2017. They became mainstream in 2021 during the pandemic and investors started putting more into the NFT market. Since then, the market has cooled off and begun to stabilize. But what can we expect to see moving forward? NFTs are essentially secure and easy-to-use tracking ledgers and their rise has sparked discussions about all sorts of useful applications. Some emerging uses include tracking ownership of luxury goods, tracking ticket sales to deter ticket scalpers, and even applying blockchain technology to track the distribution of humanitarian aid.
Why it Matters
Why are we talking about NFTs? While you yourself may not be looking to purchase an NFT, it is important to be aware of the rise of tokens, cryptocurrency, the use of blockchains, and the future applications of the decentralized Web3. To learn more about Web3 and the rise of a token economy, check out our blog: 💻What Is Web3 And Why Does It Matter?. As these technologies continue to gain traction and develop, it is likely that they will evolve to take on bigger roles in our day to day lives.
Key Takeaways for You
Non-Fungible Tokens
NFTs (non-fungible tokens) are unique assets that are tracked on a blockchain. The NFT market gained popularity during the pandemic but has stabilized moving into 2023.
2. Blockchain
The technology behind NFTs, specifically blockchain, have a variety of applications as a secure decentralized tracking system for different tangible and intangible goods.
3. Web3
The rise of Web3 will likely make the use of these technologies more prominent in our lives so it’s useful to understand them and the role they may come to play.
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