What is NFT & How To Use It

What is NFT, how do you utilize it, where do you store it, and how long will it be with us?

What is NFT, How To Use It: Only the lazy one has not yet written a post about NFTs (non-fungible tokens), but I'm not lazy, so I'll write my own too.

The NFT trend started back in 2017 with the famous blockchain game CryptoKitties. Then the excitement about Crypto Kotikov was so widespread in the community that, in addition to selling pictures for 600 ETH, it practically blocked the operation of the Ethereum network itself for several days. With the crypto-winter in 2018-19, the hype for “cats” subsided, but ERC-721 standard tokens remained and in 2021 they created a new NFT hype.

According to Defi trackers, the total volume of NFT sales at the end of 2021 exceeded $13 billion, although at the beginning of the year it was only about $2.5 billion, and in 2020 it was even less - $14 million.

What caused the wave of general interest in the NFT? How does an ordinary teenager get $400,000 in income from collecting pixelated images of whales, how ordinary-looking pictures are sold for millions of dollars and how long will they last?

What is NFT?

NFT (non-fungible token) - a non-fungible token is a token that creates a digital impression of a unique object. A song, a painting, a football card, or another product, for example. The digital certificate for this one-of-a-kind object is the NFT.

NFTs began to be utilized to digitize unique virtual creations as the business progressed and interest in tokens rose. NFTs have made it feasible to ensure the unique ownership of digital art in the same manner that we protect our tangible property ownership in real life by registering it in public registers.

The manifestation of interest in non-fungible tokens is fueled by outstanding personalities - world stars, politicians, entrepreneurs, and bloggers. They see it as a great way to support truly talented artists. In addition, NFT is an alternative for investing in the future, because the bright breakthrough of cryptocurrencies has not yet been forgotten.

Where can NFTs be applied?

More on What is NFT, How To Use It, Even though now the main scope of NFTs is cute “animals” in crypto games this is not the only place where they can be appropriate. Due to their properties, NFTs can be used in services that need to be 100% sure that the user is real. At the same time, such a user does not need to be recognized; he can stay anonymous, and his access to the service or products will be granted just by his existence on NFT.

So, for example, on September 25, 2021, the international conference “ Money of the Future ” was held in Vinnytsia (Ukraine). A feature of the event was ticketed in the form of non-fungible tokens issued on the Polygon blockchain. Participants received their NFTs according to the purchased ticket - Standard, VIP, Afterparty and could remain anonymous if they wished. The presence of such a ticket confirms the right to attend the event, while it is impossible to fake it.

To buy an NFT ticket, it is enough to connect the Trustee Wallet crypto wallet to the event website and make a payment, the ticket itself will be immediately displayed in the application.

For legal entities and individual entrepreneurs. In rubles with Russian-style closings.

The exchange is decentralized. ExonSwap allows users to establish a non-fungible token (NFT) on the Tron blockchain, which acts as a form of "login" to the site and allows you to supply liquidity to trading pairs and participate in an affiliate network. It is worth noting that this is a unique practice that has not been used anywhere else, more details about this can be found on their ExonCenter website.

Another use for NFTs could be the right to take photos of models or interview bloggers. For example, photo models ValentiVitell and AngelSetFree, by selling their NFTs on the Opensea marketplace, provide buyers with additional bonuses, details can be found in the description of the NFT itself.

NFTs have become very common in online games, as they can be game stuff - unique items, weapons, etc.

Cases of using NFT in the real estate sector were also recorded - in the summer of 2021, an apartment was sold in the capital of Ukraine using non-fungible tokens.

The very idea of ​​owning real objects through NFT is not expected to go unnoticed. To obtain ownership of a material object is much faster than formalizing this right in real life. For example, ownership of an apartment is carried out by collecting a package of documents, contacting a notary, drawing up a sale and purchase agreement, obtaining an extract from the state register, and purchasing NFT, you just need to complete a cryptocurrency transaction in the blockchain.

Where and how to properly store NFTs?

If NFTs were formerly solely found on the Ethereum blockchain, they are now found on practically every prominent network. You can find NFTs on Ethereum, Harmony ONE, Polygon, Solana, BNB Smart Chain, Near, Tron, Cardano, PolkaDot, and many more blockchains. Such an assortment poses some problems for users:

• Firstly, it is difficult to decide on the choice of a network and, accordingly, a marketplace for creating NFTs

• Secondly, there is no single application that would support all networks at the same time, and storing NFT on a centralized resource like exchange is somehow obscene.

Therefore, the right solution for storing NFTs is to choose a non-custodial crypto wallet (where private keys are only with the user) with maximum network support. For example, Trustee Wallet supports NFT on Ethereum, Polygon, BNB Smart Chain, Harmony ONE, and even Ropsten, Rinkeby testnets. It is currently the only crypto wallet with this feature.

Legal regulation of NFTs

We live in a world where each state has its legal system and clear procedures for fixing property rights, which have been formed over the centuries. How is the issue of ownership of NFTs regulated from a legal point of view?

The answer is simple: no way. Today, neither the process of creating nor buying/selling tokens is regulated by law.

On the one hand, due to the nature and function of tokens, NFT might be seen as a "legal document" for a certain object. The right of ownership includes the right of the owner/possessor to own, use and dispose of material objects and excludes the possibility of exercising the rights to this object by other persons. Roughly speaking, ownership is a monopoly on a thing.

On the other hand, for a real object, intellectual property rights apply, the author can sell it and dispose of his work as he wants. However, he cannot intervene in the creation and sale of the NFT “attached” to his work. Also, anyone can download or distribute copies of the object, even if you have fixed ownership of it. The address in the blockchain will be different, but the work becomes public and it is impossible to establish control over the reproduction of copies.

Even though such tokens are unique, non-fungible, and exist in a single copy, and information about each of them is publicly available, stored on the blockchain, and cannot be faked, It's still unclear which court will rule on contentious topics in business dealings with them.

Considering all of these factors, the legal framework in the field of NFT is currently undergoing significant modifications. It should take place comprehensively, satisfying all parties so that the development process does not stop, and the rights of each person are protected.

What motivates consumers to purchase high-priced NFTs, and what are the prospects?

Despite the ambiguous legal status of NFTs, people still buy them. Non-fungible tokens, on the other hand, can fetch hundreds of thousands of dollars. Why are they being bought?

According to my observations, there are several reasons for this: some are trendy and ready to spend money to be on the “wave”, others inject funds thereby supporting the industry and “hype”, others create excitement and news for the media by deliberately buying pictures for several million dollars. Other various kinds of manipulations are also appropriate, however, some firmly believe that their NFT will rise in price over time, so they increase their collection.

The growing trends in the digitization of information will likely contribute to the further development and use of NFTs. In the future, functional non-fungible tokens will be in use, which will be of real value - material or virtual.

Of course, one should not dismiss the possibility that the rapidly growing popularity of NFTs may fade as rapidly as it arose, and the NFT market may disappoint users.

Only time will tell whether the technology will be massively distributed and generate innovative directions and applications. In any case, NFTs have become a good impetus for the popularization of their creations by many artists, an interesting experiment for users, and an impetus for the development of the entire crypto industry. 

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