In the last article, we talked about tokenization and token types, and we mentioned a curiosity about Cryptopunks (one of the most expensive NFTs in 2021). However, Non-fungible tokens are a much broader topic, and it’s worth taking a closer look to understand their phenomenon.
What is NFT?
Let’s start with the definition. NFT means non-fungible tokens, and it’s a cryptographic certificate that features uniqueness, non-indivisibility, safety, and a lack of possibility to make the technical changes. They are based on blockchain. We can distinguish two main aims of NFT’s. Let’s talk about them!
NFT has its utility characteristic. Because of its features discussed above, it will provide a certificate of authenticity for the asset. What can we tokenize? Everything has a specific value, e.g., mortgages, entitled rights, works of art, or even an exclusive bottle of wine. A purchaser who will get the NFT is assured that he has not been cheated. It has a deep meaning for the market functioning. Now people have a much more comprehensive range of possibilities to invest in different areas. You wanted to trade antiques, but you have not been able to verify their authenticity? You need to have NFT for your item, and you can be sure that it is not a copy.
The promise of uniqueness
The second air of NFT we can describe is something we can call the promise of uniqueness. It is a type of utility that makes it a phenomenon from the psychological approach, not only practical or technological. Let’s remind that we can tokenize practically everything – films, music, photos, GIFs. Let’s imagine that your favorite rock band creates one-of-a-kind tokens featuring, for example, their previously unknown song. Then there is a huge demand from the markets, and a show limited to one piece. It does mean, in practice, that fanbase will outbid each other and raise the price to astronomical levels. What does it stem from? It is driven by inestimable values such as emotions associated with the feeling of uniqueness of a fan who will have the only product in the world.
Two faces of the market
The above division reflects the general mechanics of the market. From the point of view of generating added value, we can divide it into those areas whose catalyst is cold economic calculation; the second is the emotional hype that motivates people to behave against the principles of homo oeconomicus conception. That is why professional investors and a popular YouTuber releasing a series of T-shirts can often put an equal sign between their account balances. One generates benefits from real economic value, the other from real value generated by monetizing human emotions. Translating this to a hypothetical situation from the NFT market – one person will want to purchase an entities rights verified by the certificate, and the other will need to buy the photo of the artist in NFT. In Both cases, they could speculate on their NFTs’.
As a curiosity, it’s worth mentioning NFT called “Love” sold by polish Youtuber for one million PLN. According to the author’s concept, her photo and an abstract idea of love are included in the token. A fan bought it, and we can explain it by the desire o have something unique from her. You can question the point, but the market did its job, and it valued the token at a million zlotys and paid for it.
NFT ID token in Candao
Once we know what the NFT market is and its rules, let’s check how it is used on our platform. The identity of every Candao member is properly verified. We use CandaoID, which uses the ID based on NFT and the wallet history. Due to it, you can be assured that the people you connect with are not fake accounts. The identity of a Candao member is also his certificate of authenticity itself.
NFT founded its place on the market that has a dualistic nature. It’s hard to close the whole definition in one world because it depends on our approach. We can call it a tool, a cultural phenomenon, a technological solution, or a milestone. What will it be for you? Let’s share your opinions in the comments!