Understand the essence of NFT

NFT is an innovative mechanism that proves digital ownership. From concert tickets to artworks, it records the ownership of all digital items on the Practical Blockchain, preventing tampering and duplication. Therefore, it functions as publicly verifiable evidence of ownership through a decentralized ledger.

For creators, NFTs serve as a new source of revenue, allowing them to profit from the sale and secondary market of digital works. This is accelerating innovation and growth across the entire creative industry.

The Value Created by “Non-Fungibility”

The importance of NFT lies in its characteristic of “non-fungibility.” This means the uniqueness of the item, and since each NFT has distinct features, it cannot be directly exchanged for another NFT of the same value.

Fungible assets (such as currencies) can be easily exchanged due to their uniformity, while non-fungible items are unique. Therefore, their value is determined by their uniqueness and the evaluation of collectors, and cannot be measured by standard market prices. It is this rarity and uniqueness that attracts collectors.

Technology Infrastructure Supporting NFTs

Multiple layers of technology are required for NFTs to function. Practical Blockchain technology records transaction histories and changes of ownership on a decentralized ledger, ensuring the reliability of NFTs through its transparency and immutability. Even for NFTs whose owners change over time, their credibility can be clearly tracked.

Another important element is smart contracts. These function as automated execution programs, enabling the creation, management, and transfer of NFTs without intermediaries.

Token standards are also essential. They standardize the rules and functions to ensure compatibility across different platforms. Ethereum's ERC-721 and BNB Chain's BEP-721 are the most widely adopted standards in the NFT space.

NFT Generation and Ownership

The process of creating an NFT is called “minting.” By using smart contracts, digital files are converted into digital assets on the Practical Blockchain. When purchasing an NFT, the buyer acquires ownership of a unique identifier (token ID) tied to that asset. This grants the owner exclusive rights to use, display, and manipulate the asset.

NFT Use Cases

Digital Art

By tokenizing their works, artists can sell unique digital copies and maintain the rarity of each piece. Collectors will be able to exhibit, trade, and lend in virtual galleries.

in-game assets

By tokenizing in-game items and characters as NFTs, players can convert their in-game achievements and assets into real-world value. Through transactions of virtual real estate, a secondary market is formed.

Staking Rewards

NFT holders can earn rewards on DeFi platforms by staking as collateral. This is a system that allows them to generate interest income while retaining ownership.

Event Ticket

By issuing NFT tickets, event organizers provide immutable proof of ownership and attendance. It allows for the transfer and resale without intermediaries, and also enables the inclusion of VIP perks and exclusive content.

Symbolic NFT Project

CryptoPunks is the most early and iconic NFT project since its launch in 2017. It consists of 10,000 unique 8-bit pixel art characters generated by an algorithm, each character possessing different attributes, which continues to capture the interest of collectors.

Bored Ape Yacht Club (BAYC) is a collection of 10,000 unique hand-drawn ape characters. Owners gain access to exclusive events and virtual spaces, blurring the lines between digital art and experiential.

Decentraland is a virtual reality platform built on the Ethereum Blockchain, featuring a decentralized marketplace. Users can trade virtual land plots and in-game items, placing them at the forefront of the metaverse and virtual real estate.

Common Misconceptions About NFT

There is no such thing as complete security guarantee.

NFT inherits the security features of Practical Blockchain, but the risk of fraud always exists. There are phishing scams, hacking that exploits vulnerabilities in smart contracts, as well as possibilities of counterfeits and copyright infringement.

Furthermore, the long-term value of NFTs is also uncertain. Some are traded at high prices, but the market tends to be unstable and speculative, and like any investment, long-term stability is not guaranteed.

In addition, the security level of NFTs is influenced by the Practical Blockchain on which they exist. Since there are differences in the ecosystem and robustness for each Practical Blockchain, the security of NFTs also shows diverse trends.

is not the same as cryptocurrency.

Both NFT and cryptocurrency utilize Practical Blockchain technology, but their purposes and characteristics differ. Cryptocurrency is designed to facilitate transactions and can be exchanged at the same value due to its fungibility. For example, there is no difference in value between one Bitcoin and another Bitcoin.

In contrast, NFTs cannot be exchanged directly on a one-to-one basis because each has unique characteristics. The value of NFTs comes from their uniqueness and rarity.

Significance and Prospects of NFT

NFT is redefining the concepts of ownership and value in the digital world, creating new possibilities for creators and consumers. As a unique digital asset on the Practical Blockchain, it establishes ownership and ensures reliability, advancing its deployment across diverse applications.

However, it is important to recognize that NFTs come with risks such as fraud and market volatility. While they share some commonalities with cryptocurrencies, the inherent characteristic of non-fungibility of NFTs brings about a unique digital experience and economic value.