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What is an NFT

Would you buy an ugly drawing for $100 million? Of course not, who would? But when these terrible pictures were bound to their owners by the use of a technology called “Non-Fungible Token” (or NFTs), the crypto world went completely crazy.

When you buy an NFT, it’s yours, full stop. It cannot be stolen from you. Nobody can claim it’s theirs unless you transfer it.

Pictures aren’t the most exciting use for NFTs. In the future, they may be used in real estate, for example. No need for notaries, no need to keep receipts of purchases: the blockchain knows which house belongs to whom.

What is an NFT

This concept can go very far. The idea: a computerized, tamper-proof and indisputable property title.

In short: an NFT is an unfalsifiable, indisputable, and indestructible title to property. Online.

Better than a piece of paper.

How does an NFT work?

How does an NFT work?
To understand how NFTs work, you first need to understand what is a blockchain and a smart contract.

A blockchain is a form of database, whose main feature is to be distributed instead of being saved in a single file, on a single computer or server.

A smart contract is an algorithm or computer program executed on a blockchain. Its use cases are potentially infinite.

Therefore, a NFT is a smart contract on a blockchain, whose code’s role is to link a virtual item like a picture, to a wallet (and therefore, to an individual).

What is all that noise about NFT pictures?

In 2021, an incredible trend appeared with NFTs of various kinds of pictures (punks, apes, zombies…) being traded for millions of dollars.

The speculation of NFT, similar as on art objects, promise of a plus-value if you are early enough before reselling the asset, in addition to the ease of purchasing an NFT, led to a crazy boom in NFT creations and transactions.

Most people don’t get why the NFT technology is interesting. This is why hearing about all these “jpegs” selling for massive amounts of money caused a lot of confusion among the people who heard about it.

The potential uses of NFTs

NFTs are a very current topic and their use cases are being worked on and developed as we speak. Here are a few very likely use cases that we will see in the future:

Video games
Far from the current NFTs that some big studios have created in order to grab some cash, NFTs might change a lot of things in the video games of tomorrow.

Today, some games are already using NFTs as their central feature, but in a rather primitive way that we can compare to Tamagotchis.

In the future, NFT could incarnate items, skins, and various game elements that could be used in various games, customized, traded between players, etc. The incorporation of such financial elements in the gaming area is a topic on its own, commonly referred to as “GamingFi”.

Real estate
Your property title as an NFT, without the need for a notary, real estate agency, and massive piles of paper to sell it or rent it. This is how NFTs can make the real estate market much more efficient and even cheaper.

Food tracing
People are increasingly concerned about the origin of the food they put on their plates. And tracing the food up to the producer is impossible, most of the time. With the use of NFTs, however, each ingredient could become easily traceable.

Imagine a farmer growing carrots. He creates an NFT for a batch, where information about his farm and the date of cultivation are included. The carrots are then sold to a food factory, incorporating this NFT as well as the NFT of other ingredients into the packaging of their newly cooked product. And the consumer of that food can therefore easily know everything about what she is eating.

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