What is NFT? What role can they play in business?

A non-exchangeable token is a unique digital value. in some cases you have to pay tens of thousands or even millions of zlotys for it. NFTs are beginning to dominate the world of entertainment, art and commerce. Some are already announcing the end of the phenomenon towards the DeFi 2.0 concept. But today we will focus on the development of an economy based on oil and tokenization, ie blockchain architecture.

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NFT is a complex puzzle for all novices, but CEO Smartverum claims that there is a purely economic mechanism behind it, known from traditional economics. The only variable in this situation is the transformation of material values ​​into digitally created ones. Normally, we all know that the value of something is a matter of social contract and trust. This is the case, for example, for currencies that have become a form of representation of labor relations in relation to purchasing power. That’s why I say so it costs as much as people are willing to pay for it.

Value is determined by a person’s belief in it, but it must be characterized by the recognition of a larger social group that can recognize the value of a particular object in relation to other goods belonging to other members of society. Thus, it is obvious that the most valuable things are unique, unique and, above all, unique and different.

Centuries ago, gold was such an item for Europeans and is still a serious investment. But this was not the case for the people of South America. They saw no special value there, because the material was a large part of the overall picture there. The effect of this discrepancy was even mythical confabulation El Dorado, which at that time kept many search parties awake at night. This example shows how much the relative value is, but the limited accessibility helps to determine it. This effect is quite visible in our psyche, and the methods of influence have long determined the need to mark goods as limited or exclusive.

– Non-exchangeable token, anyone can make it themselves, but this concept is more difficult to understand. In my opinion, NFT is the first successful attempt to transfer values ​​from the physical and material world to the digital world. We have been able to do this thanks to a limited number of specific objects that have been transformed into a digital object and an unambiguous ownership of it – Says Bartosz Bilicki.

What do NFTs have to do with cryptocurrencies?

– Cryptocurrencies are similar to NFTs, but focus on measurable value. For example, if I have several bitcoins, each of these bitcoins does not matter, because each of them has the same value, I can exchange them, I can divide, I can send 1/10 of this bitcoin, I can even divide. becomes smaller values. All this shows the blockchain technology, that is, the technology that can clearly describe the supply chain, that is, who owns the first bitcoin, to whom I transferred it, how much and when. This is done outside the central registers of such information. Such a registry, for example, could be a bank in the traditional world of finance, and in the world of cryptocurrencies, our servers are so scattered that we do not even know where it is located. – Bilicki explains.

Unlike bitcoins and other cryptocurrencies, NFTs are not based on the computing power of the system responsible for a particular transaction in a chain block, although they use the same technology and are more unique in that the same technology is responsible for its current valuation.

A token cannot be divided, and in the general sense of the word it cannot be called a currency. – It is perfect for depicting blockchain art, computer game elements, you can digitize stamps, cards and other items that may have a single value, so, for example, if I have a few hundred zlotys banknotes today, they are the same nominally, but if If some celebrities sign on to one, then one of these bills may suddenly be much more valuable. For such treatments, we can use NFT technology, which additionally protects it cryptographically – Bartosz emphasizes Bilicki.

Is NFT a scam?

When many people think about NFT, they see colorful monkeys, luxurious pictures or disgusting graphics created by Martha Linkiewicz. The digital love from Martha Rentel, the bizarrely acquired Bieber monkey, and the rather childish-looking Minecraft called Snoopvers don’t create positive associations among smart people, although the Mobile Trends Podcast guest rightly points out that icons and technology are just a tool. Just as a compass can draw a beautiful circle and draw someone’s eye.

By definition, the tools are not bad, and their proper use can have a positive effect on the public, but in the case of NFT is not as simple as a compass. – In a world where we know we can do certain things anonymously – we can run our own cryptocurrency anonymously, as well as our own NFT. If so, it is clear that many frauds have been committed. For example, there were counterfeits of popular works or even popular NFTechs, so many people were deceived or created very expensive NFTs at one time, but after a month they lost their face value because a person, group or project in general lost interest – Says Bartosz Bilicki.

Unfortunately, many people also speculate about tokens, declaring their low profitability. It should be noted that according to Bartosz Bilicki, we claim that the weakening of the token value is not a fraud. No one will guarantee to anyone that something will always maintain its purchase parity. This is perfectly illustrated by the ever-changing exchange rates, and although they differ in small percentages or even fractions, when there is inadequate power behind the war or at the helm, the value of money can fall sharply until it arrives. In the Venezuelan option, toilet paper is more expensive than your salary. – Two-thirds of middle and lower-level workers receive a minimum wage that they can’t even afford toilet paper – Anabella Abadi, content director at the Caracas Chronicles website, says.

This does not mean that the market is perfect. However, you can’t demonize him in a hurry. – We were deceived only when we received something that was not initially presented to us. We must rely on our own intellect, but also on the opinion of the people who deal with it. We can lose everywhere, but there are no special rules in this market for people who do not have a completely pure intention – the expert explains.

See also: What is a tokenization platform? How to use it?

What role can NFT play in business?

– Let’s not surrender to FOMO! Currently, NFT is not a recipe for success for every industry. I have no idea how a local vegetable grower can get rich in oil. Well, maybe if he added NFT potatoes to every potato, maybe he would be interested in a target like young people and would be more eager to buy vegetables or fruits, says the CEO of Smartverum.

Tokens and the financial environment around them can be very surprising and changeable. This is a world that can surprise us with various price increases. Especially people from the financial world may not understand this. Well, when they buy a stake in a certain company, they are convinced of what the company is, where and what products it produces, who is responsible for its management, and what are their financial results. Investors have a number of tools and skills to verify most of the facts that interest them, which will allow them to evaluate their investment contributions. This behavior usually allows them to enjoy long-term paid dividends, and the shares can be kept on paper.

What to do if an unknown organization suddenly releases a token allegedly the author of a certain character worth tens of thousands of dollars? This information can be disturbing, although giant brands with global coverage, such as Adidas or Nike, or even PwC, with the information behind your head, we must be careful about their actions, because they are real institutions with big capital and capitalist hunger. Influencers are also responsible for NFT, which is increasingly valued more than the value of specific companies, and there are more and more examples of this. Confirmation may even be the existence of a token exchange where people ruthlessly give these carriers a face value. – We are dealing with a completely different financial instrument here, and I think we should approach it this way. Of course, NFT is not the answer to everything and will not replace the stock exchange. When it comes to assets within a concept of financial instruments, I still believe it is worth having a diversified portfolio. It’s worth owning gold, cryptocurrency, NFT and, of course, not spending money you don’t have – CEO Smartverum explains.

Why does Middle Kowalski need NFT?

Currently, tokens are also used to sell event tickets, where we can get better results from such transactions within a local digital file. Tokenization also allows you to belong to specific communities, such as the Bored Ape Yacht Club.

Tokens are primarily a technology used to show genuine authorship or ownership. – I would look at NFT not as a work of art, but rather as a tool that can clearly transmit something from the world to the digital world – Bilicki says. At OpenSea, we deal with the tokenization model of domains, images, and other files. NFTs can be used as a certificate of ownership confirming that we have an undeniable ownership of something through the information stored in the blockchain. In the world of NFT, we have an advantage over paper certificates, which are often falsified in art.

– In the world of NFT, even if someone falsifies something, it will never delete it, so the buyer will be able to know at least in the future, even if he does not understand what he bought at first and does not have the appropriate moderation. This is fake, so the digitization of property certificates is one of the main cases, but let’s leave room for property rights lawyers here – Bilicki says.

If you’re interested in how NFTs relate to games, mobile apps, or collectibles, listen to a podcast with Smartverum CEO Bartek Bilicki.

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