How the NFT market leveraged blockchain tech for explosive growth
June 13, 2021. Summarized by summa-bot.
Compression ratio: 19.3%. 2 min read.
NFTs backed with blockchain tech are an incredible invention because they are a different way of thinking about property and copyrights.
It’s fun to talk about nonfungible tokens, or NFTs, because they are the perfect example of how the impact of blockchain technology in people’s lives goes way beyond the financial market.
This article will clarify what NFTs are, how they work, how the NFT boom started, and why blockchain technology has made it possible for NFTs to create a new economy.
“An NFT is a pattern of smart contracts that provides a standardized way of verifying who owns an NFT, and a standardized way of ‘moving’ nonfungible digital assets. ”
All those nonfungible digital assets could be NFTs. An NFT has a data structure (token) that links metadata files that may be fixed in an image or file.
Since the data of the piece of art is uploaded, nobody can retrieve it or delete it, and the chance of your artwork disappearing is practically nonexistent if your NFT is registered on a blockchain.
Similar to the ERC-115 and the ERC-998 standards, ERC-721 is a pattern of smart contracts on the Ethereum blockchain that brings a standardized way of verifying who owns an NFT, and a standardized way of “moving” nonfungible digital assets.
As explained above, the first benefit of NFTs backed by blockchain technology is standardization.
Besides the standardization of the primary attributes of NFTs — such as property, transfer and access control — blockchain technology allows NFTs to incorporate additional features, like specifications on how to acquire an NFT, for example.
NFTs based on blockchains allow users to move their nonfungible assets outside of their original environments.
The instant marketability of NFTs based on blockchains brings greater liquidity to markets that can serve a greater variety of public, enabling significant exposure of nonfungible assets to a broader group of buyers.
An interesting trajectory in this new NFT world based on blockchain appeared because of recent trends and new markets, such as programmable art — which allows collectors to interfere in the original design of the art piece.
Indeed, nonfungible tokens and blockchain technology markets still need to embark on a long journey to solve scalability, marketing infrastructure and the applicable jurisdiction in NFTs with decentralized storage.