NFTs have been gaining attention in recent years as tokens of asset value tied to digital data. In this article, we will explain the meaning of NFTs, what they can do, how they work, and the terms that are used now in an easy-to-understand way. We will also present business usage examples, how to purchase, and points to note.

What are NFTs?

NFTs are digital data with immutable value. First I will explain the detailed meaning and history in simple terms.

Meaning of NFT (Non-fungible Token)

NFT stands for "Non-Fungible Token". Tokens are digital data created by blockchain technology, and virtual currencies are well known.

Adding value to digital data has been difficult until now because it can be easily duplicated. But, with the advent of blockchain technology, which makes it difficult to falsify data, assigning a unique value to digital data has become possible.

History of NFTs

It started in 2017 with the birth of a game called "CryptoKitties" on the blockchain platform Ethereum, where you can buy, sell and breed digital cats. In the same year, the NFT industry “crypto punks” was also born.

After that, in 2021, the work of digital artist Beeple was sold for about 5 billion dollars and the first tweet of Jack Dorsey, one of the founders of Twitter, was sold for about 20 million dollars. It is accelerating.

What can be done with NFT and its mechanism?

Because NFTs are assigned unique values, they can be traded freely on the blockchain. We also created a system that returns profits to creators on secondary sales. Here, we will explain what you can do with NFT and how it works in an easy-to-understand way.

Create something unique

A key feature of NFT is that it cannot be replaced by others and is unique. For example, in the NFT digital industry, each transaction is assigned an asset value, which includes identifying information. For this reason, even if digital art looks the same, it is considered a unique entity that cannot be exchanged.

Also, even if it is duplicated, identifying information is not printed on the copy, so duplicates and originals can be identified. Information and records remain on the blockchain, making it difficult to manipulate.

Trade freely on the blockchain

Because unique NFTs are assigned an asset value, they can be traded freely on the blockchain. Like virtual currencies, NFTs can also be freely transferred. Because information and records are published and recorded on the blockchain, anyone can make verifiable and highly secure transactions. Also, it can be said that it can be traded freely outside the country and is characterized by existing structures.

You can add various information and functions

NFT has the programmability to add various information and functions. In the case of paintings, secondary sales usually do not become income for the creator. But in the digital industry of NFTs, a portion of the sale is paid to the manufacturer during the secondary sale. can be included.

It is also possible to create a system where profits are continually returned to creation. Creators have the advantage of being able to protect the copyright of their creations without paying a margin to a copyright management company and without receiving the full amount of revenue.

Genre: Where NFT is used

NFTs are widely used in fields like industry, games, and real estate. Let's take a look at the main genres where NFT is used.

Digital Art

As mentioned earlier, the use of NFTs in the industrial sector is spreading. NFT technology allows the creation of digital art that cannot be reproduced proprietary. As a new investment target, it is attracting a lot of attention from investors.

the game

Games where NFT technology is actively used. If you convert items and characters into NFT, create a market in Metaverse, and buy and sell them, you can make a profit. Traded characters can also be used in other games.

Music

Many music artists have already announced their entry into NFT. Not only will a portion of the profits be returned to the artist if the music is sold, but profits from secondary sales will also be returned. This is a feature that you can directly deal with users.

Housing

NFTs have also started to be used in the real estate industry. Real estate-related contracts are usually made on paper, but doing so takes time when communicating remotely. But, by using NFTs that cannot be duplicated, data can be exchanged anywhere and contract procedures can be expected to be simplified. There is also the benefit of preventing contract fraud.

eating and drinking

NFTs have spread to the food and beverage industry. For example, restaurant sponsor slots are sold on NFT and customers can advertise by placing their QR codes on store menus. Also, there are some restaurants where NFTs are sold as memberships and can only be used by holders.

Usage examples of NFT

Various businesses have already developed using NFTs. Here are three examples of how NFTs are being used now.

Digital Art x Electronic Certificate of Residence

In areas where the population is growing, electronic resident cards have started to be sold in conjunction with the NFT digital industry. As a result, based on NFT sales profits, it is now possible to promote local projects and solve problems with our own financial resources. NFT owners can participate in community chats dedicated to digital residents and participate in regional revitalization.

Share purchase of vacation home

A hotel that has started a service that allows you to share and purchase a villa using NFT has become a hot topic. We sell membership NFTs that allow you to use the hotel on a daily basis. NFT owners have rights not only for temporary accommodation use but also for the duration of the property. In addition, it is possible to buy and sell in secondary distribution and gift to third parties. 

Management and Trading of Distilled Liquor Barrels

A company has also emerged that offers a service that allows whiskey barrels to be converted into NFTs and managed and traded. We sell NFT distilled liquor barrels in small lots so that even individuals like collectors and drinkers can manage and trade. As a result, it is interesting that you can enjoy the aging value of whiskey. After aging, you can exchange NFTs for whiskey.

NFT: How to purchase

If you really want to buy NFT, open a dedicated account and wallet. We will explain how to purchase NFT in an easy-to-understand manner.

1.     Open a virtual currency exchange account

Virtual currency is required to purchase NFTs. First, open a virtual currency exchange account. Ethereum (ETH), a virtual currency often used in NFTs, is managed by many virtual currency exchanges and can be easily purchased through apps.

2.     Create a cryptocurrency wallet

Prepare a wallet to store virtual currency. Be careful not to leak the secret recovery phrase that can be recovered if the password is lost. Once the wallet is ready, insert the virtual currency.

3.     Purchase on the NFT platform

Buy NFT on the NFT platform. Also to buy, you can also sell on the NFT marketplace. You can select your favorite genres from different marketplaces and abroad.

Notes: When using NFT

NFTs are widely used in various fields and are also used in business, but there are still problems in terms of legal development. Finally, let's examine the points to be aware of when using NFTs.

Beware of Fraud

There are scams selling fake works pretending to be famous creators. Only copyright and ownership may not be reproduced by NFT. Since data itself can be duplicated, duplicate content can be sold. In the NFT marketplace, issues such as account fraud and content duplication are being improved, but caution is required when using it.

Ownership may not be recognized

Under the law, only tangible objects are subject to ownership, and ownership of intangible objects such as data is not currently recognized. It is also worth noting that digital ownership rights have not yet been enshrined in law. Please understand that an NFT is a token issued on the blockchain and not a contract outside of the blockchain.

NFT is digital data with asset value

NFT is a digital token based on blockchain and is characterized by its asset value as it cannot be replaced. It is being used in various businesses including but not limited to art, games, and music. A system has been developed that makes trading relatively easy, but some parts of the law are still inadequate. So let's use it while understanding it.