NFTs : A Deep Dive into the future of Art and Ownership in the Digital Age

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By Degen Lipsa

In recent years, a revolutionary concept has taken the art world by storm – Non-Fungible Tokens, or NFTs. These digital assets have sparked immense interest, controversy, and excitement, fundamentally reshaping the way we perceive and interact with art and ownership. As we plunge into the digital age, it is crucial to explore the profound implications of NFTs and their potential to redefine the art market.

What are NFTs?

NFTs stand for Non-Fungible Tokens. These are basically the legit way of transferring the ownership of an item. In other words, Non-Fungible Tokens (NFTs) are distinctive digital assets that serve as proof of ownership or validity for a particular product or piece of content. Each NFT has unique characteristics that make it different from others. A few examples of these properties are collectibles, virtual commodities, virtual real estate, music, and video.

NFTs in the art world
source: coingape

Blockchain technology is used to create NFTs, most frequently on Ethereum, however other blockchains like Binance Smart Chain and Polygon have also become more prominent. The blockchain offers a decentralized and transparent ledger that verifies the ownership and background of every NFT, assuring its legitimacy and avoiding duplication or tampering.

One of the most intriguing features of NFTs is their ability to establish verifiable scarcity, the motive being scarcity will create demand. Through the use of smart contracts, creators can assign specific quantities to their NFTs, ensuring that only a limited number of copies or editions exist or even just make a single piece. This scarcity can contribute to the perceived value of an NFT.

The history and evolution of The Non-fungible Tokens :

It was in 2014, when the creation of the first NFT, “Quantum,” by Kevin McCoy on the Namecoin blockchain was done. Nevertheless, the notion that resulted in the creation of BRC-20 tokens was first introduced with the introduction of Bitcoin-based coloured coins in 2012–2013. Meni Rosenfield first proposed this notion in a 2012 paper, which paved the door for the development of digital tokens on the Bitcoin blockchain. However, in 2017 after the introduction of Ethereum blockchain, the NFTs existence was seen. And it was eventually the year of NFTs as the entry of Ethereum lowered the entrance barrier for starting NFTs projects giving them a platform to flourish.

Quantum : The first minted NFT

The story started off with colored coins, which were created to represent and manage ownership of real-world assets on the blockchain. However, they were different from Bitcoin (BTC) because of the “nonfungible” element that provided them with a unique utility as Bitcoin was never made to store databases in the first place.

Therefore, a new set of NFTs named “Rare Pepes” was released on the Counterparty platform initiating the use case of NFT in the world of world. “Spells of Genesis,” created on Ethereum, was another huge NFT project after The Counterparty.

How NFTs work and the role of Blockchain in it?

No doubt that the emergence of Ethereum blockchain paved the ways of the NFTs projects. But the question comes, How? Well, NFTs are created through the process of minting and the information is stored on the blockchain validating the ownership. The minting process incorporates with the smart contracts which assigns the ownership and ensure the ownership transfers.

After the tokens are minted, they are assigned a unique identifier or key directly linked to one blockchain address. Each token has an owner, and the ownership information is open to everyone and is transparent. Even if 1000 NFTs of the same exact item are minted, each token has it’s own unique identifier and can be distinguished from the others.

The blockchain’s decentralized nature ensures that once an NFT is minted, it’s ownership history cannot be altered or tampered with, providing a transparent and immutable record of ownership. NFts can be transferred between different platforms and marketplaces due to the standardization of token formats and protocols. The most common standard used is ERC-721. However, a new standard named ERC-6551 has brought revolutionary changes giving NFTs the power of being a wallet itself.

ERC-6551 is Ethereum’s new standard for NFTs that aims to make them more dynamic and interactive. It gives ERC-721 NFTs the full capabilities of an Ethereum account using token-bound accounts.

ERC-6551, The revolutionary standard for NFTs

Non-Fungible tokens captivating The World of Art :

NFTs have revolutionized the concept of ownership in the art world. With NFTs, artists can tokenize their digital creations, establishing indisputable proof of authencity and ownership.

Artists can now sell their creations on various NFT marketplaces and not just earn by selling it but also earn NFT royalties with every transfers that happens. NFTs have also attracted a new breed of art collectors who appreciate the uniqueness and digital nature of these assets. Collectors can now acquire and trade NFTs easily, expanding their art collections beyond physical limitations. This way, Non-Fungible tokens offers unprecedented opportunities for artists, collectors and enthusiasts.

Some of the popular market places are OpenSea, Wazir X, and many more.

What are NFT royalties ?

NFT royalties are a form of passive revenue that a creator receives for every sale of their finished product. The product could be any type of digital material, including music, artwork, gaming tools, and more. While producers profit from the initial sale of their NFTs, they also receive royalties for each future sale.

Art and digital content are now a reliable source of income for creators ,thanks to NFT royalties. As programmatic payments are more common, this strategy may be helpful to a number of authors.

NFTs have expanded beyond art into domains such as music, sports, gaming, and virtual reality. Musicians can release limited edition albums or songs as NFTs, granting special access or benefits to holders. Sports organizations have utilized NFTs to offer unique collectibles, such as digital trading cards or virtual stadium experiences. In gaming, it also enable players to own and trade in-game assets, providing true ownership and value to virtual items.

As the technology continues to evolve, the future of Non Fungible Tokens holds promise for further innovation, integration into mainstream platforms, and potential solutions to address the challenges associated with them.

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