The NFTs made news headlines after several celebrities started supporting the initiative. Whether to take advantage of the hype, or because they really believe in the proposal, it is certain that non-fungible tokens are here to stay.

An example of this wave happened with forward Neymar who recently spent a few million to buy two pieces of gear from the Bored Ape Yacht Club collection. The PSG player even threw a themed party celebrating his acquisitions.

And when someone of that size, among many other celebrities, starts investing in the concept, the world starts to pay attention.

But despite the brief success, do you know what NFTs are and how they work? If these are your doubts, we have prepared content to explain the concept, in addition to bringing the main advantages and applications of the technology.

Good reading!

What are NFTs?

NFTs are representations of unique and exclusive items, whether digital or physical, that use blockchain technology to ensure the integrity of the “registration” process. But to better understand this concept, we need to delve deeper into the term and the proposal that NFTs bring.

NFT stands for non-fungible token. That is, a token — a digital representation of an asset — registered through a blockchain and, therefore, becomes unique and exclusive.

That is, everything that cannot be replaced, in a way, can be characterized as a non-fungible item. And its authenticity can be verified by validating the token, which gives the owner more security.

Why are NFTs so important?

NFTs are important to ensure protection for digital or physical goods. Although copies can be made and distributed, only the original work has commercial value. Thus, works of art can even be replicated, but the original item belongs only to one owner.

And as the entire linking process is carried out on blockchain, there is no possibility of property theft, although it is possible to carry out authenticity queries by third parties.

Thus, we have some very important advantages when betting on NFTs. We can list some, for example:

Valuation

As they are items that are gaining a lot of popularity in recent years, the appreciation potential of an NFT is extremely attractive and advantageous for those who wish to invest and profit in this market.

Scarcity

Owning a much-desired and scarce item is really a big plus for individuals who value this trait. Therefore, for those looking to differentiate themselves by belonging to extremely rare items, NFTs are a good choice.

Flexibility

Finally, we have a very important and useful application of NFTs, which is their flexibility. An NFT of a work of art can be presented in any corner of the world without having to move the original item, which brings more security and practicality to this type of action.

Examples of current (and future) applications for NFTs

Now that you understand how NFTs work, it’s time to understand their main applications. In this sense, despite being more used for images and works of art, it is essential to know that non-fungible tokens have more practical uses.

Digital and collectible cards

Virtual soccer leagues, NBA, and Magic and Yu-Gi-Oh-style games are on the NFT’s list of practical uses. By linking and validating the cards to their owners, it is easy to arouse the desire to own and engage with NFTs.

digital certificates

Digital certificates for high-value and collectible goods are already traditional items for the public, but they have taken on new life with the arrival of NFTs.

Traditionally, these documents are stored in physical paper records or even PDFs. So, as we can imagine, bureaucracy to validate an object or even the lack of security are recurring problems in this case.

Given this scenario, NFTs helped solve the security issue and cut through the bureaucracy to ensure that a high-value item is linked to some individual.

Domain names for websites

As we could see, any digital item that needs security, transparency and practicality can be linked to an NFT. Thus, some projects offer the technology to register website domains.

In practice, the domain is registered on the blockchain and linked to its buyer. This prevents theft or asset transfers from happening in an unwanted way.

contents

The same goes for internet content as a whole. Songs, tweets, meme photos and texts can be linked to NFTs, where the aim is to protect copyright and likewise give more governance to assets.

In the case of memes, we separate this report that shows classic memes that became an NFT in 2021.

luxury goods

Some luxury goods can also benefit from all the values inherent in NFT technology. A curious project is the registration of fine wine bottles to prevent counterfeiting of products made possible by OpenSea.

In other words, beverage buyers were assured of the quality of the product, as validation could be done through blockchain technology. Thus, the NFT of each bottle can act as a certificate to raise the value of the product and the brand as a whole.

Games

Some electronic games use elements in their gameplay to make the entertainment proposal even more attractive. This is the case with the game Axie Infinity, which created creatures called “axies” as NFTs, in the best Pokémon style, as a feature of the game’s battles.

In the end, the applications of NFTs are immense and virtually endless. As it is still a very new technology, we will see a huge expansion of the proposal to solve real-world problems.

Whether in financial products, protection of luxury goods, digital assets or even for fun, through games, it is certain that non-fungible tokens will gain more popularity to remove the stigma that technology is restricted to a few.

Did you like the content? So, take the opportunity to also read: Technologies for 2022: 7 highlights to know and learn this year