What is an NFT Used For?

NFTs - or Non-Fungible Tokens - have been the talk of the blockchain circles in recent years. Since their introduction, they have been gaining plenty of attention. Some have seen it as a tool to make more money while others see it as an opportunity for certain purposes including exclusive access, special privileges, and more.

This blog post will provide you with a glimpse of what an NFT is used for and why they commanded such an importance in recent years. You’ll learn about how they are utilized and what the future might hold for them. Let’s get started.

Understanding NFTs

What makes them so unique?

While NFTs exist within the blockchain, they are not the same as cryptocurrencies like Bitcoin or Ethereum. NFTs in particular are indivisible and non-interchangeable. Meaning that they are one-of-a-kind and will not be exchanged or replaced - which of course is reason enough to call them “non-fungible”.

How are they different from cryptocurrencies?

Since NFTs are considered one-of-a-kind, they represent ownership by one person. With cryptocurrencies, they are minted in multiple numbers. Thus, a trader can buy or sell a multiple of a certain asset on the market.

With NFTs, only one asset can be sold to another person. It can be listed on an exchange for a certain price. Since it’s one of one, there are no multiple copies.

Once it’s sold, it’s sold. And it won’t be available for sale until the current holder decides to sell it themselves.

How are NFTs Created

NFTs are created by way of minting. A digital asset is recorded on a blockchain, resulting in a unique token being generated. 

The Role of NFTs in Digital Art

Since the introduction of NFTs, many of them have appeared as works of digital art. Since then, they have served as a force to be reckoned with - often competing with those who sell their artwork by traditional means. Many artists would either pivot towards digital art and in turn, sell the creations they made.

As such, their digital artwork is sold for more money compared to their traditional art pieces. Artists will prove that they own an authentic piece of artwork they have created. They do this by establishing a transparent and tamper-proof record, intending to deter art forgery.

At the same time, they are protecting their works of art to ensure they receive a share of the proceeds from resales, if and when they happen.

Since the introduction of NFTs, the art world witnessed record-breaking sales focused on a single piece of digital art. For example, “Everydays” The First 5000 Days” created by Beeple sold for $69 million at an auction.

Digital art being sold at an eye-popping amount gives credence that NFTs in the art market have established a great deal of power. Further proving the fact that one of one fetches more money than pieces of art that have been replicated and re-created over the years.

NFTs and the Gaming Industry

NFTs have gained a foothold in the gaming industry. This is due to NFTs being used as an in-game asset or collectible - giving one true ownership of their virtual items. They can also buy, sell, or trade these assets.

This ability has allowed gamers to create a secondary market for in-game items. NFTs have also paved the way for “play-to-earn” games. These games allow players to earn rewards for their in-game achievements in the form of NFT-based items.

Meanwhile, OpenSea and other NFT marketplaces have been frequented by gamers. That’s because such platforms offer gamers to purchase virtual items or trading their current stockpile.

NFTs and Music

As a way to connect with their fans while monetizing their work, musicians see a new opportunity thanks to NFTs. Taking advantage of the “one token, one owner” concept, musicians provide their rabid fans with opportunities to own exclusive digital collectibles.

These items include but are not limited to unreleased songs, special editions of their past albums, and even concert tickets. Musicians will also have a more direct interaction with their fan base while being able to gain a larger share of their revenue from the work they create.

Rabid fans of a certain musician will feel like they’re fandom was well worth it. Especially when they own something that has never been heard by the general public before.

Real Estate and Virtual Land

NFTs have also created a market for virtual real estate. Specifically, Decentraland and The Sandbox have been developed for this type of market in particular. NFTs are considered a currency for the purchase, sale, and development of virtual land.

In turn, it also provides plenty of unique opportunities for those looking to invest in virtual real estate. An NFT will allow a user to claim ownership of parcels of virtual real estate. The value appreciates while the virtual world expands over time.

Collectibles and Memorabilia

Sports fans and collectors may see NFTs as a new opportunity to collect items more valuable than what you’d see on Pawn Stars. These include digital collectibles involving a favorite team or player.

NFTs have also been a hit with those who are fanatics of collecting trading cards. These include digital trading cards and collectibles. It gives collectors an opportunity to create a collection that is a mix of physical and digital copies.

Not surprisingly, marketplaces of these collectibles have been created. NBA Top Shot is considered one of the most popular marketplaces for sports fans alike.

Navigating The NFT World Can Be Tricky, Let Us Help

The NFT World as new as it is can be challenging to navigate. At PermuTrade, we offer NFT consulting for those who are brand new to the whole thing. We know that this market is booming, but the evolution is still ongoing.

Want to catch the wave but not sure where to start? That’s where PermuTrade comes into play. If you want to learn more about our NFT consulting, visit our website.

For any further questions, you can always contact us on our site.