How can Companies absorb disruptive effects and begin to integrate these new business models into existing and new business opportunities?
NFTs have taken the world by storm. Rejuvenation of the Blockchain Movement started by Bitcoin followed by the smart contract platform Ethereum. NFTs seem like a natural progression in the explosion in tokenization of assets of all kinds of things we value.
NFT stands for non-fungible token and to understand NFT we need to understand the concept of fungibility!
What is an NFT?
An asset is considered fungible when it is considered to be interchangeable with another identical item. For example money that can be changed for other forms and modalities or other purposes. In the crypto sphere, most of the native assets like Bitcoin and Ethereum perform the same function, besides their main purpose or usefulness, they are also fungible tokens. By defining this, non-fungible tokens or NFTs reverse the definition of fungibility and offer a unique perspective on other things that are as valuable to us as money and can be measured in fungible units.
NFTs solve the problem of uniqueness and a unique asset type. Examples include not only popular collectibles such as digital art, music, and other digital collectibles that we appreciate and appreciate, but also other practical items such as digital ID cards, medical records, credit information, and others that are unique and valuable to us and serve a purpose in digital networks operated by Blockchain.
While blockchain is the underlying technology that provides a transaction system by forcing a digital ledger and enforcing rules for intervention over smart contractsIn addition, principles such as immutability, transaction recording, and transparency have been enhanced to make it easier to review and move assets with an embedded system of trust.
What can NFTs be used for?
NFTs are also a type of token and asset class online – other token assets can include stable coins, security tokens, token securities, and others. NFTs are unique in that they can be tradable (art and collectibles) or mortgaged (medical records or digital history), and this is where things get interesting. Since NFTs are also valuables and find their way onto the market, they need a fungible token such as a utility coin or a stable coin in order to derive the value in a measurable way. These marketplaces usually need to be integrated into either bank rails or existing crypto-provided rails such as digital exchanges or a DeFi ecosystem to facilitate trading and transfer.
I am addressing the complex problem of a volatile and rapid rise in NFTs after a similar meteoric rise in an decentralized financing (DeFi), which creates amazing innovations with the immense promise of democratization, new business models and global marketplaces with global access – all driven by the basic premise of decentralization and fundamental constructs of tokenization and wallets. NFTs can be characterized as unique cryptographic tokens with a certain value for the owner (ID, health record) or a market (art, collector’s item).
Where are NFTs going next?
NFTs that have intrinsic value and are essentially tokens that are simple evidence of the existence, authenticity and ownership of digital assets. Fungible tokens are valued on various bases, e.g. B. based on the total amount of economic activity in the network (cryptocurrency), utility (smart contracts and transaction network processing), assigned values (as with stable coins and security tokens), etc. NFTs represent both transferable units and non-transferable tokens that we estimate.
We are starting to realize the promise of a blockchain that envisions digitization, tokenization and democratization of finance by enabling networks that are able to move values with reduced friction and mediation. The question to think about now is: How do companies, individuals and corporations understand the transformative and disruptive effects and begin to incorporate these new business models into existing and new streams of business opportunity?
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