EZ Wallet 101: What is an NFT?
The term NFT has been famous for the last few years as blockchain technology and crypto adoption has taken off. One could say the term has become famous, others might say it has become infamous. In both the crypto, finance and digital world, few terms are more controversial and polarizing than NFT. But what exactly is an NFT? Do NFT’s deserve love, or vitriol? Is NFT technology a valid and important innovation, or a scam? Let’s dig deeper into the complex and often misunderstood world of NFT!
🎴What is an NFT?
NFT stands for “non-fungible token”. To simplify it, think of an NFT like a trading card that is one of a kind, and that unique trading card is stored on the blockchain. NFTs are unique digital assets that are exchangeable, whose authenticity is validated by the immutable nature of blockchain technology.
💻How does it work?
NFTs are individual tokens with valuable information stored in them. Currently, most NFTs are on the Ethereum chain, a public ledger that records transactions, though other chains have their version of NFTs including Binance and Solana, among others. Each NFT has a market value that is determined by supply and demand, same as any other asset.
The most classic example of an NFT are those used for art, especially pictures, and like their physical counterpart, NFT can be bought and sold. NFT’s uniqueness comes from their ability for ownership verification, item validation, and sale history to be easily verified via the transaction history written to the blockchain.
✅The immutable nature of the blockchain
The main support for the use of NFT technology can always be traced back to the blockchain. Item verification is a crucial part of a number of business transactions. Are you selling a rare piece of art at Sotheby’s? Someone needs to verify that what you’re selling is authentic. Selling a large shipment of machine parts to another business to use in manufacturing? You better believe the receiver is going to want to verify the authenticity and quality of said product.
How important can NFTs become? Let’s crunch some numbers. Currently counterfeit goods account for over 3% of all world trade, with an annual revenue of around 500 billion dollars. Fake and counterfeit items have been a thing since the dawn of time, but NFT is the solution.
For example, imagine you want to buy a new Chanel handbag. They sure are beautiful, and they sure are expensive. A friend down the street offers to sell you her old Chanel handbag at a discount. What a great deal, but since you are not purchasing the item from a verified Chanel seller, how can you really be sure the bag is authentic? Some fakes are so good they can pass an eye test, and counterfeit producers are experts at faking realistic results to fool consumers.
Instead, let’s imagine an alternative scenario: The original buyer buys the Chanel handbag. The physical item exists, but along with the purchase, the buyer is also given an NFT of said bag, validating its serial number, manufacturing date and place of sale. The product now utilizes the validity of blockchain technology to verify the physical item. The bag can now be sold on the secondary market, the NFT can be transferred to a new owner, and the product is still verifiable, and can be bought and sold over and over again without losing credibility as being authentic. Lamborghini’s racing team, for example, has begun using NFTs to authenticate car parts. Now imagine this technology in a field where verification is even more crucial, like surgical items used in life saving healthcare. Overall, using blockchain technology to validate real goods through NFT verification remains one of its strongest features.
Digital goods are even more credible when backed up by NFT technology since there is no risk of counterfeit, as the digital goods are tied to the NFT. Increasingly consumers don’t just want to show off what they own in the real world, but in their digital persona’s as well. A great example of this is the use of the Bored Yacht Ape Club NFT for personal avatars among crypto enthusiasts.
As the world becomes more virtual and digital assets become more prevalent, NFTs will be an important part of digital commerce in a variety of industries. Let’s take a look at some of the ways we can use NFT.
🎮What are NFT used for?
- Digital Content: Content creators can use blockchain technology to verify their digital content. Music, art, pictures, video can all be NFT, and sellers can utilize this technology to prove their digital content is authentic, unique, or rare. This also protects small market artists, since their work becomes better protected against counterfeit.
- Gaming Items: One of the most lucrative business markets currently is video games, and in-game monetization makes video game companies billions each year. People are willing to pay hundreds, if not thousands of dollars for unique in-game items, but ultimately the item still belongs to the manufacturer. The player’s investment is profitable for the company, and not the player. NFTs allow players to seize control of their in-game assets, allowing players to not only customize their game, but profit while doing so.
- Manufacturing and data verification: Most global trade involves many different centralized corporations trusting each other enough to freely trade goods and data. NFTs streamline this process by making data points decentralized, so verification of produced goods, or shared data can be more reliable.
- DNS — Domain Name System: NFTs provide you with a domain with an easy to remember name. This works like a website domain name, making it memorable and valuable.
🎯Where to start?
Currently the biggest and most reliable market for NFT is OpenSea, though other markets exist, and specific markets exist primarily for one unique form of NFT, for example an NFT auction market specifically for one video game created in-game.
Or, you can start by joining the EZ Wallet community to learn about NFT. With the EZ Wallet Learn-and-Earn center, crypto users have a safe and risk-free place to learn about crypto while earning crypto. The EZ Wallet educational courses offer everything from Crypto 101 to more advanced topics even the most advanced user will be interested in learning about. There you can learn about NFT technology, blockchain, and crypto wallet technology, and get rewarded simply for educating yourself.
But someone can just take a screenshot of my NFT and steal it!
Sure, this might be true if they want to post your NFT on Facebook, but increasingly there are more creative ways to use your NFT as a visual form of verification. For example, EZ Wallet is integrating an NFT avatar function. This in addition to the “sending with confirmation” function allows users to trust their transaction endpoints without worrying they are sending to a wrong address, as only NFT can be used, and each NFT is unique and non-fungible.
So…are NFT scams?
The truth is NFT technology is a new technology, and as such, it is a market full of scams, poorly designed concepts and rug-pulls. But even as controversial as the NFT market still remains, one cannot argue against the myriad of ways NFT technology will forever change numerous markets, commerce, collectibles, and our digital landscape.
About EZ Wallet:
EZ Wallet is on the journey to make crypto more accessible and convenient for everyone, from the crypto newbie to the seasoned crypto vet. The EZ Wallet team is a diverse and dynamic team aiming to create a non-custodial wallet that makes everyone’s journey into the crypto world easier, with a more friendly interface that simplifies the Crypto process while simultaneously pushing the boundaries of what advanced features a digital wallet can provide.
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