What does the Future Hold for Blockchain Technology?

A quick guide to get you up to date with NFTs in 2022

There has been a crazy boom of mysterious NFTs on the internet for the last two years. People are making 100s to 1000s of dollars on random images on the internet. 

Large companies such as Opensea and Rarible have built their entire business around NFTs and have been extremely successful. 

Established companies like Coinbase are also jumping in and providing their customers with options to secure and collect NFTs.

NFTs are also getting mainstream acceptance, with major platforms like Twitter and Instagram allowing NFT profile images. We’ve also seen many partnerships between Polygon and other companies to integrate NFTs. 

Should you jump on the bandwagon too? Why are millions being poured into something with no clear use case? Is it just a short-time fad, or is it here to stay?

From a Technical Standpoint

As far as the blockchain is concerned, an NFT is just a correlation between a particular address and the NFT’s metadata (a mapping in CS terms). Every NFT originates from a Smart contract that is deployed to the blockchain. 

In this article, let’s look at the most popular blockchain for NFTs- Ethereum, to simplify it.

Smart contract → Blockchain → Holders Address

The smart contract holds the data of an NFT, like its metadata. As the blockchain is an expensive place to store data, generally, the metadata is outsourced to the IPFS link ( a form of decentralized storage), which can store large amounts of data (MBs to GBs). 

Along with the NFT metadata, you also have the unique marker, a sort of list that separates one NFT from others NFT#1, #2, etc.

You can interact with the functions of the NFT smart contract — Like sell, buy or delete (and other functionality if added).

What makes it hold value? As blockchains are decentralized and Global, your NFT is also decentralized, global, and unique. Only you, the owner of the NFT, can change things about the NFT, making it a sort of digital property accepted worldwide. You must show that you own the address to retrieve the rest from the blockchain.

From a Practical Standpoint.

NFT’s uniqueness and the ability to limit the supply means that NFTs can be used to store real value. In 2020, there was a massive boom of NFT art, where art created was being sold as NFTs. 

The price of simple NFTs soared as celebrities and big names joined the field. 

Apart from a speculator's market, there is also good real-world application, especially with video games, where you can monetize the amount of time you have spent playing a video game. 

Many card games have seen a lot of success with NFTs. Here you can merge/breed different characters to get better offsprings, like in the case of Crypto-kitties.

If NFTs are sold with no unique selling point or story just to pump and dump, they usually quickly lead to downfall. But when an NFT has a back story and real use case, it holds value and makes money. One example is V-friends by Gary V. It still holds decent value after two years of release. It doesn’t have any use case but has been marketed extremely well. 

What does the Future hold?

Digital Property is the name of the game when it comes to NFTs. Older techniques that may have worked before will not work anymore, and we have to tie down real value with NFTs for them to be successful.

Other than investment opportunities, they can also prove ownership. This is going to be crucial in the new age of Social media. Like in dArticle.io, where every article is an NFT, users can get paid depending upon the revenue generated.

Video games are going to see a large demand for NFTs. We can also have major video games that rely solely on NFT sales for monetization. NFTs for video games won’t be just character skins but will be integrated with the playing process, like achievement trophies and other things.

There has been a lot of talk about making NFTs connect with the physical world. 

Many projects have tried to connect real estate to NFTs, but most fail due to a lack of trust in blockchain technology. 

But don’t give up yet. This transition will definitely happen, just later. With NFTs, you can integrate part ownership and De-fi abilities with real estate. 

Just imagine a REIT using blockchain technology! Wouldn’t that be great? Commercial real estate will be accessible to everyone.  

Conclusion

NFTs are here to stay. They have been portrayed in a bad light because of the scams. This will change over time as more decentralized apps integrate them wisely. 

Be careful if you are trying to get into NFTs as an investment. They are best used with utility in mind.

You can also think of getting into the market as a developer. NFTs are still in the infancy phase. There is potential yet to be unlocked. The world is going to be decentralized, and it starts with NFTs.