What are the application scenarios of the fervent NFT? How can it be realized with technology?

This article is from Crypto Valley Live, original title: "Hot Topic | Why NFTs Have Taken Over Silicon Valley?", Author: Matheus Leal, Translation: Jeremy.

In the past few weeks, you may have imagined the reasons behind the high value of these digital images. NFTs are unique entities that cannot be replaced by anything else. These tokens are a unit of data on the blockchain, with each NFT representing a unique digital item. It has gained a foothold among artists, game developers, and other professionals dealing with authors' works. This concept is also useful for several other issues. We introduce you to some possibilities of this technology and how to apply your own NFTs.

Incentives

After seeing the news of Grimes making a million dollars or Nyan Cat being sold, you may have imagined the reasons behind the value of these digital images. We have seen several news articles explaining what NFTs are. What is rarely discussed is that this technology is not just about exchanging digital images for large amounts of Ethereum.

NFTs can represent digital files such as art, audio, video, in-game items, and other forms of creative works. They are a unit of data on the blockchain, with each NFT representing a unique digital item. This concept is useful for several practical issues.

The main advantage of this technology is the guarantee of authenticity, which does not imply additional costs or the need for a regulatory body. NFTs can help solve existing intellectual property issues. Moreover, they can generate revenue for parts of ownership that are difficult to control today. In this article, we will introduce you to the possibilities of this technology and how to apply your own NFTs.

NFTs

In September 2020, artist Matt Kane sold a piece of art for $100,422. This would have hardly made the news, but due to the right timing and circumstances, this event gained attention for being the first crypto art creation to cross the $100,000 barrier. Each NFT is a unique token on the blockchain. Most NFTs are implemented based on Ethereum, but this is not a requirement.

Ethereum is a decentralized platform capable of executing smart contracts and decentralized applications using blockchain technology. They are applications that work entirely according to programming, with no possibility of censorship, fraud, or third-party interference because the contracts are immutable.

Generally, these NFTs use the same token structure. The ERC-721 standard is a token created under its smart contract standard for the Ethereum network. This model is designed to create interchangeable tokens but with unique and non-fungible characteristics.

NFTs are unique entities that cannot be replaced by anything else. For example, a unique trading card is non-fungible. If you exchange it for another card, you will have something completely different. NFTs can be anything digital, but currently, much of the excitement revolves around using this technology to sell digital art.

Crypto Art

Crypto art is the term used to distinguish all artworks sold on the blockchain. NFTs have caused a huge stir in the art world. An artist named Beeple recently sold an NFT for $69 million, while in the sports world, NBA-licensed Top Shot cards have generated a total sales volume of $230 million.

You can copy a digital file, including the art contained in an NFT, as much as you want. But NFTs are designed to give you something that cannot be copied: ownership of the work. Importantly, artists can still retain copyright and reproduction rights, just like physical artworks. From the perspective of collecting physical art, anyone can buy a print of Monet. But only one person can own the original. Beyond what is stipulated in the contract, you can certainly enjoy the pleasure of having the work visible to anyone in your crypto asset portfolio. It's like having a gallery in your pocket. This can be said to be very valuable for collectors.

For digital artists, the appeal of using blockchain lies in the simplicity of ownership. Crypto art is more secure against the threat of copiers compared to anything else published on the internet. A person can easily record a video or screenshot an image and proudly display the copy on their desktop. But with NFTs, the owner purchases a verified token that provides digital evidence proving the artwork is theirs. It's somewhat like the artist's signature. The idea is to provide a degree of authenticity that is naturally conferred upon physical art.

Beyond the Art World

Any NFT is just a digital souvenir, no more, no less. In this case, an NFT is a digital souvenir on a valuable platform. It can work like other speculative assets; you buy it hoping that one day its value will rise so you can sell it for a profit. Technically, any digital item can be sold as an NFT. International DJ deadmau5 has sold digital animated stickers. There have been some attempts to link NFTs with real-world objects, often as a method of verification. Nike has applied for a patent for a method of verifying the authenticity of sneakers using an NFT system called CryptoKicks.

One of the most interesting aspects of NFTs is how they are used in games. There are already games that allow you to use NFTs as items. One game even sells virtual land as NFTs. There could be opportunities for players to purchase a unique gun or helmet or something else in the game as an NFT, which would be a flexibility that most people can appreciate.

Another increasingly popular use is in the music industry. Kings of Leon released a new album that includes an NFT version, which comes with certain exclusive benefits, such as privileged positions at live performances, special albums, and different artwork. These tokens will be sold for two weeks and then become collectibles, which their owners can trade. Anyone can listen to the band's hit songs, but only buyers will own the original files.

Try It Yourself

Now we introduce you to a solution for creating NFTs using the standard ERC-721. For this, we need to write code in Solidity. This is an object-oriented programming language used for writing smart contracts. It is used to implement smart contracts on various blockchain platforms, most notably Ethereum. We created a file that contains the interface for this token model. This is the interface for our token. The main difference from fungible tokens is that each token has a unique ID.

In the next file, we will create the product ownership structure. Modifiers are used to change the behavior of functions. This contract is declaring a modifier called unique owner, which checks whether the account interacting with the contract is the owner of a specific product. If the condition is not met, the required function will throw an exception.

The NFT interface has the methods and events that our token must implement, ProductFactory has the data structure and functions responsible for creating new products, and the ProductOwnership contract implements the methods of the NFT interface.

Conclusion

NFTs are a craze that has taken over the elite class of Silicon Valley. Their biggest distinction lies in the ability to be unique entities, which cannot be replaced by anything else. They can be used to represent digital files such as art, audio, video, in-game items, and other forms of creative works. Using the ERC-721 standard, we proposed an application method to create your own NFTs. Now you just need to imagine new possibilities for use.