Recently a new vocabulary, NFT, has been gaining popularity in the blockchain circle. What exactly is NFT?
NFT stands for Non-Fungible Token, i.e. non-homogeneous token. Non-homogeneous means that it corresponds to one thing and one thing only. In plain language, NFT tokens are simply not interchangeable with each other.
So what can NFT do?
The key innovation of NFT is that it provides a new way to mark ownership of native digital assets. With NFT, these native digital assets would be able to operate independently from centralized services. Ownership of NFT does not prevent others from inspecting it or reading it. NFT does not capture information and hide it. Instead, NFT captures information and uncovers its relationship and relative value to all other information on the chain.
Because of NFT’s non-homogeneous, non-dividable nature, it could anchor the concept of a real-world commodity to the digital world. Examples include tokenized tickets, a precious bottle of wine, a uniquely designed piece of jewelry, an art painting by Leonardo da Vinci, a jade artwork, a collectible, etc. These physical items have intrinsic values. We could digitize them and execute hash encryption, forming a private key with a unique hash value. This unique hash value will correspond to a specific physical asset.
NFT’s current application scenarios
Art collections
We have talked about encrypted collectibles and artworks based on NFT framework. We can also record more information such as contracts, copyrights, and patents in the forms of NTF on the blockchain for subsequent updates, circulation, and transactions. When its owner wants to sell it, he simply needs to produce this NFT token information to declare the authenticity and ownership of the item. The authentication is digitally traceable because the ownership of the asset is recorded on the blockchain. This design could ensure the legitimacy of the transaction while preventing forgeries and frauds.
Game props
NFT is becoming popular in the gaming industry. In-game items can be tokenized and easily transferred or exchanged. For example, NFT can be used to transfer or exchange in-game weapons, clothes, real estates and other items for tokens or even real cash. This creates a digital economy of virtual goods. These NFTs are stored on the blockchain. Their information, attribution, and all transaction records will be open and transparent as well as indestructible and tamper-proof.
Electronic Tickets
Because of blockchain’s tamper-proof and traceable features, blockchain has an innate affinity with certificates. Certificates has thus become one of the most typical scenarios for blockchain applications. For instance, a concert ticket and a basketball game ticket are of the same type but represent different values. Blockchain repository is ideal for business scenarios where certificates, authentication and inquisition are required. Blockchain is especially useful in cases where multi-party trust issues need to be resolved or when judicial regulatory permission is required. Moreover, the identity verification of digitalized tickets can also prevent fake tickets and scalped tickets. Therefore electronic ticketing is another industry that NFT could transform.
Identity verification
We can apply NFT to identity verification to achieve a complete recording of personal behaviors. For example, we could generate a non-tradable NFT as birth certificate, passport or driver’s license. Although these NFT are not tradable, interactive identity verification can still be achieved by managing read and write permissions. We can authenticate a job applicant’s university certificate by examining this person’s identity NFT. We can verify a doctor’s qualification by checking the doctor’s NFT information. Personal information can be tokenized. All personal attributes and behavior histories could be recorded.
Electronic certificates
NFT can offer decentralized storage for real-world contracts, paperwork and other information on the blockchain to prevent forgery and promote traceability. The authenticity and validity of the documents can be proven with the help of technologies such as electronic signatures and certificates. Electronic certificates can effectively digitize intellectual properties such as copyrights and authorship. The tradable feature of NFT will make it possible to buy and sell intellectual property NFT on the blockchain. This will further facilitate the circulation of values.
DMEX’s innovation with NFT
Many platforms are focusing on games. For example, the once-popular game CryptoKitties offers tokens for virtual lands. It can be traded directly without the need for the Internet of Things. With the newly-emerged NFT, this form of trading platform is on the rise.
Creative forms of NFT continues to emerge. Some platforms start to convert mining power to NFT, such as the decentralized mining power financial service platform DMEX. DMEX utilizes Bitcoin, Ethereum, Filecoin and other digital assets as its underlying assets. By tokenizing effective mining power as NFT, more average users could easily participate in cloud mining. Coupled with DeFi transactions, collateral backed loans and other DeFi instruments, average users would be able to earn multiple forms of stable incomes. DMEX’s platform token DMC will also reward the users for making more transactions.
NFT is highly valuable on itself. With the addition of the highly sought-after DeFi model, there will be more innovative platforms like DMEX. I believe that next year NFT will expand to more industries.
