Two years ago, Non-fungible tokens (NFTs) captivated the world with sky-high prices and mainstream attention, but then the market broke back with many saying NFTs were “dead.”
They spoke too soon. This technology continues to spread on a global scale, reshaping entire industries.
Even as the NFT market reaches sales volumes of nearly 200,000 NFTs worth more than $191 million per day, it’s easy to dismiss them as internet culture toys because of headline-grabbing projects like CryptoPunks and Bored monkeys.
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The NFT industry has spent enormous energy and resources making this possible; building, testing and shipping some of the most groundbreaking technologies to date.
While some NFT markets are now down more than 90%, writing off NFTs so quickly is a mistake.
NFTs are one How, Not one What
What does it take to trade assets in a digitally native environment? Property rights.
NFTs are just how we record who has the rights to an asset. They can certify ownership and authenticity, and they come with many of the features of blockchains, such as interoperability, secure transfer, and verification.
The NFT industry has created a revolutionary ownership system that is available 24/7/365 to anyone, anywhere at a fraction of the cost of traditional systems, and that gives uniqueness to every asset, including digital files.
The what is being bought, sold or transferred are the rights to an underlying asset linked to the NFT. The assets and rights that can be transferred are virtually unlimited.
Real World Assets (RWAs)
NFTs are a global ownership system that is changing opportunities and reshaping existing industries.
Digital Art and Collectibles: NFTs offer artists and IP holders a way to create a verifiably unique or distinctive digital item, unlocking new monetization opportunities. The holder of an NFT obtains rights that may include ownership, use, and resale of the digital work.
For example, NBA Top Shot created a wildly successful marketplace where fans can buy, sell and trade officially licensed NBA video highlights, powered by NFTs that verify ownership and uniqueness.Stocks and bonds: The financial world is also embracing tokenization. NFTs provide more efficient and accessible markets for traditional financial instruments with transparent ownership and instant settlement.Carbon credits: NFTs representing a specific amount of carbon dioxide emissions can be easily traced from inception to retirement, ensuring the authenticity of the carbon credits and combating climate change while adhering to regulatory standards.
NFT technology is also revolutionizing music, video, ticketing, gaming, trade finance, luxury goods, identity, private credit, AI, physical goods and even vehicle registries.
NFTs redefine what is possible through verifiable global ownership and authenticity. In the early days of the Internet, we didn’t know how accessible, affordable communications would change the world, profoundly impacting every industry.
NFT is reshaping the world with the same transformative power, creating unprecedented innovation and economic opportunity.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.