Why is NFT so hot?

2021-04-15 10:52:22

Although a large number of digital currencies, such as Bitcoin, have risen and fallen sharply, it has become a hot topic in the financial field, but the real fame of digital currency does not really depend on Bitcoin.

Uniswap sold a pair of socks for $160000, Twitter founder sold five words for $2.5 million, and encryption artist Beeple won $9.75 million for his work at Christie's NFT auction……


Introduction of NFT

The full name of NFT in English is Non-Fungible Token, which has the characteristics of indivisibility, irreplaceability, uniqueness and so on.

Homogenized tokens, that is, FT (Fungible Token), can be substituted for each other, can be close to infinite split token. For example, there is essentially no difference between a bitcoin in your hand and a bitcoin in mine. This is homogenization, that is, homogenization.

On the other hand, the non-homogenized token, that is, NFT, is the only and inseparable token. It's the equivalent of numbered dollars. There won't be two dollars with the same number in this world, and there won't be two NFT that are exactly the same.

Therefore, a key innovation compared to FT, NFT is that it provides a way to mark the ownership of native digital assets (that is, assets that exist in the digital world, or assets that originate in the digital world), and that ownership can exist outside a centralized service or centralized repository.


The value of NFT

We know that money is essentially a general equivalent and a carrier of value consensus. In modern society, an individual's wealth is no longer measured by the amount of money he holds, but more by his or her assets. These assets include, but are not limited to, houses, cars, stocks and bonds and other items of certain market value. For ordinary individuals in modern society, the value of assets is often far greater than the cash value they hold.

However, real-world assets often have the following two flaws:

1. Most physical assets are illiquid.

2. The cost of anti-counterfeiting is high, and some heavy assets need to be centrally determined. For example, the confirmation of the right of a property depends on the registration of the Housing Administration; it is difficult to prove that you own it until you see it.

In the blockchain world, we have cryptocurrency assets to represent monetary attributes, and naturally need a value medium to represent non-monetary assets, so NFT arises at the historic moment. Thanks to the decentralized, untampered and cryptographic characteristics of the blockchain, NFT has solved a series of problems of assets in the real world:

1. Better liquidity and efficient trading.

2. Cryptography confirms power and cannot forge assets.


Wider application of NFT

It may be in the field of intellectual property rights. NFT can represent a painting, a song, a patent, a film, a photo, or other intellectual property rights. In this area, NFT acts as a patent office: helping each unique thing register its copyright and help it identify patents.

Physical assets. Real estate and other physical assets, such as houses, can also be expressed as NFT for monetization. It can be used as a financial market such as the circulation of assets.

Record and identification. NFT is unique, so it can also be used to verify identity and birth certificate, driver's license, education certificate and so on. These can be safely saved in digital form to prevent abuse or tampering.

Financial instruments. All kinds of financial instruments carry a lot of information in the process of circulation and transaction. If combined with NFT, it can not only confirm the rights, but also facilitate tracking. In addition, the transactions of all kinds of NFT assets in the future can form a subdivided financial market.

Ticketing. Concert tickets, movie tickets, drama tickets, etc., can be marked with NFT-tickets that look the same actually have different seat numbers, and naturally NFT can also be used here.


As people become more and more aware of the potential and value that NFT can provide, more and more big brands, investors and venture capital companies begin to pay attention to and participate in it. Independent blockchain game developers are also starting to attract the attention of VCs because their products have a very long life cycle and offer a variable token model, which makes them an ideal investment. However, the future of NFT is not without challenges, as they may face regulatory hurdles. In any case, the encryption field is still very young and needs to grow as more projects are born.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

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