NFTs have advantages over traditional physical objects as they can be purchased at a fraction of the cost and take up less space to store, transport, and sell. You can check the Web to get an automated trading experience by accessing the best-in-class trading bots and trading strategies. In addition, since no warehouses are necessary for storing NFTs, distribution channels are simplified so companies can avoid third-party retailers or wholesalers.
Tracking ownership is also far more accurate with NFTs than with traditional objects, which could be ripe for theft in transit. Many of the advantages of NFTs for consumers are also advantages for businesses, including better tracking and delivery. A business can ensure that goods are never lost or stolen by digitizing and storing physical objects in a blockchain instead of only a digital copy.
Overview of NFTs
Many of the benefits apply to both real-world tangible goods and intellectual property. For example, suppose an author creates work with creative commons licensing (CC-BY). In that case, the author retains ownership but may allow others to use her work (e.g., by uploading it to a website) while retaining complete control over commercial uses that people would be more likely to pay for. Or the author could monetize her work by selling the copyright or a license to it (e.g., through an agency that manages intellectual property rights) and then exchanging this property to a royalty holder or collecting society.
Blockchain technology is part of the NFT system that allows properties such as land and mineral rights to be put on an immutable ledger, which cannot be hacked or altered. It becomes possible because land title deeds are tied directly to unique digital keys (document hashes) and electronic copies of real-world deeds in physical form.
The benefits of NFTs are as follows:
Ownership:
Since NFTs are recorded on a blockchain, they have all the benefits of blockchain technology to prove ownership, such as immutability, transparency, and resistance to censorship. Therefore, it is essential in cases where ownership of a physical object needs to be tied directly to a digital key (in this case, representing that physical object).
For example, it would be impossible for someone to steal land title deeds put on the blockchain by stealing a paper copy of the title deeds without access to the electronic version.
Certificates:
NFTs can also contain certificates. A certificate is a digital document that confirms some quality about an item or grants some right and which is linked to another item in an NFT system. Everyday use of certificates is document notarization to prove that a physical document existed at a particular time.
Another use for certificates is in timestamping, which allows the owner of an NFT to prove that certain information about their property or content existed at a particular time.
In this way, an author could put information (e.g., text) on her website and timestamp it with a unique certificate and then offer that certificate to potential buyers, who could verify when it was published. Certificates can also issue attestations, as attestation proves that an NFT has successfully performed some function.
NFTs are rare and profitable:
NFTs are like collectibles and can be rare limited edition, or one-of-a-kind. It means that NFTs have monetary value and can be sold at a profit if the owner wants to. Since NFTs live on the blockchain, they are stored safely there forever. Blockchain technology has no single point of failure, so the value of NFTs is not threatened by fires, natural disasters, or other accidents. If something happens to the original item (e.g., a painting) in your possession that you’ve digitized on the blockchain.
NFTs can tokenize any asset:
Anyone can turn any physical item into an NFT. The first NFT created was the Dragon Coin in China, a digital collectible. The game CryptoKitties famously demonstrated the tokenization of virtual cats. Other examples of NFTs include tickets (e.g., to concerts or sports games), shares of stock, and wine futures, and people can use them to represent all types of assets (e.g., land, property, and gold).
NFTs are easily tradable:
Tradability is a vital part of any asset so that its users do not lose interest when it is out of the use or otherwise unable to be traded. NFTs can be traded, sold, or gifted, and a person holds them in an NFT wallet. To unlock the value of an NFT, it must be transferred by users to another wallet (e.g., by selling it for cash)
NFTs are interoperable:
Interoperability is the ability for two or more things to work well together and with other systems. For example, with NFTs, any game that uses the ERC-721 standard (a standard for non-fungible Ethereum tokens for unique identification) can interact with other games that use this standard.