NFT Tokens ( Non-Fungible-Tokens)

The Tech Behind NFTs – Where Do NFTs Come From?

Author: Sara K

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Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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NFTs have become a huge talking point since early 2020 – whether you hate them or love them, it’s undeniable that they’re a game-changer when it comes to the world of digital assets. In fact, NFTs were such a point of media attention in 2021 that the Collins Dictionary named ‘NFT’ the word of the year.

Alongside media attention, NFTs have become a point of intrigue for financial investors, with one NFT being sold for $69,000,000 at auction back in March 2021. With financial backing and a public intrigue at an all-time high, many are wondering how we arrived here?

In this article, we’ll be turning toward the origins of NFTs, looking at the technology behind them, and explaining what exactly a Non-Fungible Token is.

Let’s get right into it.

What is an NFT?

Standing for Non-Fungible Token, an NFT is any form of digital asset that cannot be duplicated. The difference here lies in the word ‘fungible’, which represents the difference between something that can be copied and something that is one-of-a-kind. 

When it comes to blockchain, distinguishing between fungibility and non-fungibility is an important distinction to make. Cryptocurrency is a decentralized digital currency, with millions of coins making up the total pool of a crypto’s base. A cryptocurrency like Bitcoin and Ethereum use fungible tokens, as there are many of the same things. One bitcoin is exactly the same as another bitcoin, both being worth the same amount and having the same properties.

Using that example, you can compare this to how $1 is always $1, no matter if you have different notes. A non-fungible token, on the other hand, cannot, under any circumstances, be duplicated. It is completely unique – which is all down to the tech it uses.

What technology do NFTs rely on?

NFTs are built using ERC-721 standard tokens. These, unlike other Ethereum tokens, are unable to be duplicated. This makes them the perfect token to mint an NFT on, as once it’s processed, it is now a unique asset that cannot be copied.

With the non-fungibility of this specific ERC token, NFTs are granted uniqueness, giving them both scarcity and, therefore, inherent value. This technology is the core of NFTs, providing both the infrastructure upon which they’re built and the method through which they gain relative value. 

Applications of NFT Technology 

As NFT technology has continued to develop, there have been two main realizations of its technology, one involving asset security and the other involving the movement to the metaverse. 

The combination and stacking of different blockchain technologies have pushed the progress of this entire ecosystem, bringing further utility and security to NFTs and what they can offer to consumers.

Let’s break these markets down. 

NFTs and Security Technology

NFTs, just like their cryptocurrency counterparts, are connected to digital wallets, which allow people to access their digital assets. Over recent years, one of the common complaints with this system was that if you were to lose access to the wallet – either through scams, hacks, or simply forgetting your ID or password – then you’d be shut out of your own assets. 

To combat this, recent innovations within this industry have turned towards innovative blockchain technology solutions, with companies like Serenity Shield offering more complex asset management and protective solutions. By using NFT technology, Serenity Shield allows a more comprehensive system for both managing your own strongboxes, as well as allowing others to access yours in case of emergency. 

They do this by assigning three NFT key fragments to a strongbox. Each one of these NFTs is then delivered to a different location, one to the primary account holder, one to a designated heir to the account, and one within a smart contract vault that Serenity Shield protects. From there, if anyone has two of these key fragments, then they’ll be able to decrypt the strongbox and gain access to everything stored inside it.

With this system, not only does the account owner benefit from a more comprehensive level of security protection, but they can also ensure that if they were to pass away, then a designated heir would have the tools they need to gain access to the account and everything within it. 

With generationally-conscious tech security projects like this underway, you’re able to protect your investments and ensure they remain in your name for as long as you want them. 

The interest in these new forms of protecting digital assets has sparked a lot of interest over the past few weeks, with Serenity Shield now also launching a pre-sale of their $SERSH token, bringing even further utility to the system. 

NFTs and the Metaverse

One of the major movements within the world of blockchain over the past few months has been the rise of the metaverse and its surrounding technologies. Considering the metaverse and NFTs are two of the biggest applicational uses of modern blockchain systems, many companies have begun to combine these two uses into one product.

While digital art has its own value and certain beauty, as a digital medium, it’s not the same as buying a painting and hanging it in your house. To solve this, NFT distributors have paired with metaverse worlds like REALM, allowing users to store, hang, and exhibit their NFTs within this virtual space.

This marks an important moment of change for NFT solutions, as this virtual presentation of digital assets brings an exciting new system of usage for those that buy and trade NFTs. Equally, this represents a further progression of what the metaverse can do for blockchain, its invention and continual improvement shifting the possibility of this virtual landscape.

Final Thoughts

NFTs have certainly made an impact on the digital landscape over the past 18 months. From flooding the internet with a new form of a digital asset to increasing the earning potential of digital artists that no longer need to go through auction houses, they have represented a huge shift in the art market of the modern world.

Far from only impacting the world of art, NFTs have also become a new form of investment for consumers around the globe, with an incredible increase of 21,350% trading volume throughout 2021. As this technology continues to receive more funding, boosting the business interest in what it could be used for, we’re likely to see further developments.

Both within the security and in the combination of NFT technology with the metaverse, we’re already seeing how much potential this industry has. 

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Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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