Non Fungible Token (NFT)

?? ? For the past weeks, I have been writing about a Swiss Foundation called ORIGYN Foundation as well as it subsidiary ORGINY Luxury. They combine intelligent technologies and decentralized computing to identify, authenticate and unlock the powers of ownership for the world’s most valuable objects.

ORIGYN brings NFTs to life with biometric data and unique ownership experiences to power brands, creators, artists, marketplaces, consumers and industries with guaranteed certificates of authenticity.

Many of you have asked to explain what an NFT is. This post I hope will shield some light on what it is and what you can do to create an NFT and then how you can sell it.

What is an NFT ?

?? NFT means Non Fungible Token. This means non-replaceable token. The best analogy I could find is to compare an NFT to a virtual collectible soccer/NBA/NFL card. It is a new (2017) form of digital asset, created online and sold as collectibles. They are unique and can be transferred but not replaced. NFTs are frequently used to sell digital images, video clips, virtual real estate, luxury items, or fine art. In the near future, we will see content such as work certificates (training and skills), patents and trademarks take over the NFT market.

NFTs were created first in 2017 with a game called “CryptoKitties” where players could buy and breed limited-edition virtual cats. NFTs were then used to allow gamers to win in-game objects such as digital shields, swords, or any type of weapons as well as many other game collectibles. The main advantage of using tokens was the fact that gamers could transfer them between games or to another player thanks to NFT enabled blockchain marketplaces.

What is a blockchain?

?? A blockchain is a digital ledger (a method of record keeping) using cryptography (the technology to protect the privacy of a message and transform it into a digital form that can only be understood by the intended recipient). It enables then authentication and anonymity for all types of a transaction on the specific blockchain.

It is as its name says a chain of blocks. The chain is a publicly available database where all the blocks are stored.

Each block contains digital information about all transactions done on a specific marketplace – for example any payment information, ?purchasing, ordering, participants… ?Blocks use digital signature not personal data. ?It includes also a unique code called an hash that distinguishes each block from other blocks, and provides security. In order to prevent people gaming the system, an hash will be created and attributed to most recent block added to the blockchain.

A blockchain marketplace is a worldwide decentralized system of many computers/servers that work together to produce the record keeping system or digital ledger that will connect buyers and sellers directly with all records of the blockchain marketplace transactions.

Why is NFT now so trendy?

?? NFTs are coming out now because technology and human behavior are ready for it. We had to wait for blockchain technology to become more widely available for NFTs to be created. By tokenizing highly desirable physical works of art, luxury, digital media (videos, pictures, texts…), collectibles as guaranteed NFT certificates, democratized co-ownership becomes a reality. This means that everyone can have access to content and/or objects that would normally be out of reach.

?? Moreover, NFTs create new business opportunities especially with the uprising of the Metaverse.

The value of an NFT is very speculative, it is purely based on what someone is prepared to pay. This is not what we see today in our classic economy. There is no set price beyond what you would like to be paid. As it represents a unique digital asset, you do not have competition and cannot base its value on others.

When you pay for an NFT, you receive the right to transfer the token to your digital wallet (e-wallet). A digital wallet allows you to buy and sell cryptocurrencies. It exists many different types of e-wallet such as Apple Pay, Google, Pay, Samsung Pay, PayPal and many others. ?Based on your sector (art, luxury, collectibles, real estate, digital media...) you will need to choose the right one.

In order to start selling and/or buying NFTs you will need to buy cryptocurrencies and include them in your digital wallet. Traditional payment methodologies such as PayPal or credit cards will allow you to make the payment.

Once your e-wallet is connected to the NFT platform, you can start selling your creations and/or buying NFTs you desire (any digital assets file formats will do such as JPEG, PNG, GIF, MP3, MP4…)

Finally you will need to decide how you want to sell your NFT (either with a set price – defined by you or auction for people to bid in a defined time frame). As you will need to pay a listing fee to sell on a NFT platform, you need to ensure that your set or minimum price covers at least the listing/ commission fees that you will be charged.

?NFTs and gamification

?? ? As you all know, I am a big fan of gamification. It is the use of game mechanics for non-game activities. In other words, how to create engagement and fun for activities that are considered not fun.

If you combine NFT and gamification, you will be able to give value to your games, your assets within your games and then create an economy that will allow trades among gamers.

Moreover, with the increasing awareness around Metaverse, we see more and more use of NFTs in gaming. Gamers can use NFTs as characters (unique ones), commodities, collectibles, special abilities, various tradable objects in games, collectibles…

When you apply blockchain technology to gaming mechanics (leaderboards, competition, in-game digital assets, point scoring, badges - unique ones …)?you create an NFT gamification activity. Gamers can then swap and trade game digital assets for financial rewards and engagement methods. The game digital assets are programmed as NFTs and they have value for all players and/or collectors to facilitate exchanges and the creation of an in-game economy.

?? ? The Metaverse is a virtual world where people can play, work, entertain and shop. This last element of a new type of economy is essential for the creation of NFTs as we have seen above.

I hope this explanation around NFTs and blockchain can help you understand better why many world experts believe that blockchain technology can change our world more than we can imagine today. Please feel free to contact me should you have any questions.

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