If you are a tech-savvy person, you must have heard of blockchain technology and NFTs. Blockchain is soon going to rule over the world with its amazing use cases. You might be aware of these two terms, perhaps there would be a lot more to know about them like what exactly blockchain and NFT are? What are their benefits? What are their features? And if you are passionate to build a business on such platforms, then you might be searching for a blockchain development company or developer who can guide you on how to initiate it.
Knowing a little about blockchain or NFT often makes the person curious to know more about its process. Well, both are interconnected with each other. In this article, you will get thorough knowledge of blockchain and NFT. It is a bet that you will be definitely surprised by knowing its worth in the coming future.
Without wasting a second, let’s just start with them.
First of all, it is important to understand what is blockchain wallets and NFT.
Continue reading below…
What is Blockchain?
Table of Contents
A blockchain is a distributed network that works as a digital ledger and allows the secure and safe transfer of digital assets without any need for middlemen. This is a platform where any piece of art, currency, etc. can be represented in the form of a token, stored, and exchanged.
Talking about the present scenario of blockchain, then it has improved a lot with many features added to it such as private or permissioned blockchains, peer-to-peer transactions, track record of transactions, transparent system, etc. Decentralization is the other biggest strength of blockchain. Blockchain can be better understood as an organization with straightforward principles, it holds the ability to transform legacy business models and set out new doors for people.
Features of Blockchain technology
Blockchain, being decentralized, operates on the principle of peer-to-peer. As there is no central entity, the data is shared among nodes.
Immutability refers to something that can’t be changed. It ensures that blockchain technology is an enduring and unalterable network.
In a blockchain, information is shared between multiple nodes irrespective of any central entity. Hence, making it the most secure network for storing data.
- Faster settlement
Traditional financial systems are quite slow due to centralization. However, decentralized blockchain technology increased the pace of financial systems. This is possible due to smart contracts. Smart Contract developer creates smart contracts which are nothing but a set of rule in the form of code.
This might have given some clarification about blockchain. Let’s move further to NFT, how it is related to blockchain and how are these benefitting us.
What are NFTs (Non-Fungible Tokens)?
As the name suggests, NFTs are non-fungible tokens (on blockchain networks) which means they can’t be replaced. Many of you might show an expression of confusion or incredulity, but NFTs really hold an incredibly crucial place in our digital economy.
Blockchain technology-based NFTs serve as an original digital signature of any asset empowering ownership. These could be anything like birth and death certificates, collectibles, lands, and many more.
There is a deep relation between NFT and blockchain. Let’s find out where do NFT stay in the blockchain ecosystem?
Blockchain act as a ledger, as already discussed and it differs from all other trading platforms due to its immutable feature. Peer-to-peer transactions are possible and there is no central authority who can alter or undo those transactions. All blockchains have executed their own version of NFTs but most of the NFTs belong to the Ethereum blockchain.
Do you remember the arrival of Bitcoin? This was the first time when blockchain innovation came into existence. It was a protected and shared electronic money framework. Bitcoin is an open, permissionless blockchain, and fungible. Being fungible, one Bitcoin can be replaced by another bitcoin without violating any norms of the agreement. However, NFTs on the other hand are unique. It is impossible to replace one token with other as every token has its own identity.
Now, let’s just take an example of Bored Ape Yacht Club. Have you heard of this? It was a project with a profit of millions of dollars. This NFT project included apes (all having unique characteristics) that were sold for a huge amount. This club is not a new phenomenon, instead, there were clubs earlier that were made on the basis of things people own.
To get some more exposure to blockchain and NFT, connecting with any blockchain development company may prove to be beneficial.
How NFTs can be beneficial?
To get the answer to this question, we need to consider on behalf of an artist, buyer, or collector. In this way, it will become much easy to understand how NFTs can be used and can take advantage of them.
Being an artist, first of all, it is a privilege to be called an Artist. The mind of an artist is so sharp and creative, enough to attract an audience through their work. Artists sell their magnum opus to earn money. What would happen if these sharp-minded people can take advantage of NFTs and sell their work in the form of tokens?
The selling price of an artwork in the form of a digital token would be much higher than the physical piece of art. So, come up with attractive digital tokens to sell on the blockchain network to earn profit. Sellers also get paid a percentage every time an NFT sells. If you are not aware of the NFT creation process, you can contact experts in NFT blockchain to make more profit through your creativity.
It is clear that selling NFT can definitely lead to numerous benefits, but how buying could be beneficial!
Well, buying NFT would be supporting your artist who is selling the artwork in the form of digital tokens. When buying an NFT, the buyer gets some usage rights like posting the image online, setting a profile picture, and bragging rights.
In a case, if anyone is just a collector, then NFTs could be your greatest asset in the nearby future. Buy them and store them in your blockchain network; once the value of that NFT goes up, make your move by selling it for more profit.
Discovered the amazing benefits of NFTs! You would definitely feel blessed for getting acquainted with this emerging futuristic way of trading one’s own assets at higher profits. NFTs are unique, immutable, and indivisible; offering infinite trading possibilities.
Some common features of NFTs
Every NFT has a different identification code and metadata from others. This makes all the NFTs unique.
NFTs guarantee ownership of the assets to the creator of the token. Suppose if the creator sold his NFT to another person for any digital currency, then the ownership of the NFT would still remain with the creator and not the buyer.
- Claim of ownership
Since NFT is stored on the blockchain network, hence you can claim its ownership on multiple networks.
NFTs are indivisible. These cannot be split into smaller denominations and trading is not possible on a fraction of NFTs.
NFTs are fraud-proof and are easily transferable with proper tracking.
Revenue generation for enterprises
When we are all cleared about blockchain and NFT, it is time to understand how to generate revenue from NFTs.
NFT business model is an indisputable and undeniable choice as there are numerous opportunities and benefits associated. For an enterprise, choosing the NFT business model can pave way for good ROI.
- NFT trading
Do you know? The direct way of generating revenue from NFTs is by selling the NFTs directly to users. People who are active on blockchain networks buy NFTs to earn profits or to collect digital assets. Users collect digital assets so that they can sell them in the future for a better price.
- NFT marketplace
This is another best way of revenue generation with Non-fungible tokens. Build an NFT marketplace just like behemoths like Amazon, eBay, etc. to trade NFTs. Creators will create their unique NFTs, and sell them on NFT marketplaces in exchange for cryptocurrency. After that, the marketplace owner charges some fees from the NFT seller, somewhere between 2.5% to 5%. In this manner, NFT marketplace owners earn huge earnings from this business.
NFTs and Blockchain are tomorrow’s reality. There is no doubt that in the coming years, blockchain technology will take a front seat. More and more businesses would love to enter this profitable platform.
The exclusive features like security, decentralization, distributed ledger, ownership, etc. make this digital financial system a reliable investment option where users can blindly transfer their finances or assets.