What Are NFTs?

Introduction to NFTs

NFTs represent a seemingly simple concept, essentially numbered tokens. However, they come with a social convention akin to a title deed. This title deed doesn’t represent physical land but acts as a pointer to a digital asset. Just as when we buy and sell land, we’re not trading the land itself but the pointer to it.

In the Digital Realm

NFTs exist within a global, digital, programmable, and interoperable environment. They share this digital realm with other groundbreaking technologies:

– Bitcoin: Permissionless, programmable internet-native money.
– ERC-20: Permissionless, programmable internet-native financial instruments.
– ERC-721: Permissionless, programmable internet-native entities spanning various categories.

NFTs: Internet-Native Ownership

NFTs, based on standards, offer a technological solution for direct internet-native ownership of intangible assets.

The Evolution of NFT Adoption

Part 1: Natively Digital/Intangible Assets

The adoption pathway of NFTs from 2020 to 2030 unfolds in two parts:

– Collectibles
– Art
– Gaming
– Metaverse
– Brands
– Culture

Part 2: Abstracted Physical/Tangible Assets

The second part encompasses:

– Services
– Off-chain assets
– Governance

This evolution seeks to encompass the vast existing stock of intangibles, amounting to over $75 trillion. NFTs also represent a “public commons” open database for the metaverse and bridge the gap between physical world assets, services, and the digital realm. Regulatory bridges are essential but may take time to establish.

In summary, NFTs represent a powerful concept of internet-native ownership, offering a pathway to digitize a wide array of assets and create an interconnected digital ecosystem.