The NFT Revolution: Digital Assets Redefined

NFTs or Non-Fungible Tokens are those tokens that people can use to represent ownership of assets. They are described as “Non-Fungible” because each one is unique and has its value. Things like art, collectibles, and even real estate are a few of the things that can be tokenized in this manner. It has often proved hard to demonstrate rights in the digital asset space, but with the introduction of NFTs, demonstrating ownership has been safer and easier.

Long before the existence of Ethereum, which is the backbone for the majority of existing NFT projects, the driving force behind NFTs was already conceptualized when a paper by Meni Rosenfield, the chairman of the Israeli Bitcoin Association, was released in 2012 that introduced the ‘Colored Coins’ concept for the Bitcoin blockchain.

The whole idea behind Colored Coins was to define methods for proving ownership of real-world assets on the blockchain, to represent and manage those assets. Much similar to how Bitcoin works, but with an added element of ‘tokenization’ which makes them unique and differentiable based on use.

The limitations of the bitcoin blockchain, which was never intended to be used as a database for tokens, spelled the end of the Colored Coins concept. However, it ended up paving the way for more experimentation in different blockchains which led to the invention of NFTs on the Ethereum blockchain, which thrives today.

The year 2021 was named the “Year of the NFT” due to an immense surge in the supply and demand of NFT projects, mainly driven by the changes that occurred within the art market and in the industry at large. Another driving factor for the popularity surge was the rebranding of Facebook as Meta, which involved the use of VR and AR technologies along with NFTs.

A subsequent effect that was caused due to the rise in popularity and demand & supply was the involvement of other blockchains that ultimately created their own versions of NFTs. A few of the notable blockchains which were successful and now thriving are Solana, Cardano, Tezos and Flow. As newer platforms entered the NFT space, newer standards were established to maintain the authenticity and uniqueness of these tokens.?

Celebrities too hopped on the hype train and created their own NFT projects. A notable example would be Paris Hilton’s “Iconic Crypto Queen” NFTs, which she created to become a prominent part of the Metaverse and introduce the same to her fanbase as well.

However, from the time when celebrities and online influencers created and sold NFTs for a fortune, the NFT space has come a long way. The current pandemic has transformed the art market, with more people starting their own NFT projects and causing a shift away from the traditional modus operandi of the art market.?

As we progress into the mainstream space for NFTs, we will see more potential use cases and great opportunities develop daily as many promising projects are now coming up, and even numerous corporates and startups are looking forward to investing and leveraging this technology to gain an edge in their respective industries.

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Article by:?Sean Pinto?@IncubateHub

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IncubateHub?is Asia's largest Open Innovation & Corporate venturing platform to drive Digital Transformation & Sustainable solutions working with Startups, Students & Professionals. We also help Startups engage with our 52+ clients including Mondelez, Faurecia, P&G, Accenture, Tata, DCB Bank, Fidelity, ITC Infotech, IBM, NASSCOM, Analog Device, Nasscom Foundation & Quest Global.