The internet has become a central point of our day-to-day lives. From social media to online shopping, it's almost impossible to go a single day without using the internet. But, as exciting and innovative as the internet is, there are several downsides to its current state.
Internet users face constant threats from hackers, cybercriminals, and other nefarious individuals who take advantage of apps and personal information vulnerabilities to cause damage or steal sensitive data.
As a result, many developers feel we are fast approaching an inevitable end game for the internet that lacks trust and security. However, blockchain technology may provide a solution to this impending crisis.
Many different parties own the world wide web. This has led to it being fragmented and disintermediated, with users having limited control over their digital experiences. In recent years, blockchain technology has emerged to enable trust and ownership through decentralization. And with the advent of non-fungible tokens (NFTs), this decentralization is going even further.
NFTs are unique token types, like being tailored to represent an individual asset or having unique attributes beyond being simply "sellable", like most cryptocurrencies.
NFTs can represent almost any asset you can think of, such as a house, car, painting, or even a song or piece of writing. They're also instrumental in tracking ownership and maintaining proof of provenance (in other words, who owns what).
How do NFTs work?
When you buy an NFT, you buy a unique token representing an asset. This token is then stored in an online wallet that only you can access, along with all of your other cryptocurrencies, such as Bitcoin.
The main difference between an NFT and other types of tokens, such as utility tokens, is that you can't use them directly to interact with a service or product. Instead, the token acts as a record of who owns what.
You can then use your NFT in several ways. Perhaps you want to sell the item to another person for money. Or maybe you want to give it as a gift.
Why do we need NFTs?
The world wide web has become where people are increasingly "publishing their content and contributing to creating shared knowledge and culture". This has created an information ecosystem that is open and easily accessible.
However, it has also led to the rise of intermediaries who take advantage of lack of transparency and trust on the internet. These intermediaries – for example, companies who host our content or govern how we communicate with one another – are responsible for controlling and overseeing our digital experiences. Because the internet is so fragmented, people have limited control over their digital lives. This is especially true regarding privacy and ownership of their digital assets.
For example, if you create a blog post, image or video and upload it to a platform like Medium or Instagram, that platform owns that content. And although these platforms give you the option to "download your content", this is often a time-consuming process. With NFTs, tracking ownership of digital goods and maintaining proof of provenance is much easier.
What types of NFTs exist?
There are many different subtypes of NFTs. Some examples include: - Collectibles: Unique items you can buy, sell and trade. These can be anything from virtual art pieces to tangible items such as baseball cards and sneakers. - Livelihoods: Asset-backed tokens representing a person's skills and ability to earn a living, such as a work of art or a song that can be used in advertisements. - Utility tokens: Tokens used to access a specific service or product, like a ticket to an event or a subscription to a website.
Tracking ownership of digital goods
Tracking ownership and provenance of physical items is not a new problem, and plenty of solutions have been developed to address it. What's exciting about NFTs is that they can be applied to digital goods, where things get trickier. If a product is digital, you don't necessarily have the same evident proof of ownership as you do for a physical item.
This is a problem for digital content that is bought or sold online, where you're relying on a centralized entity to have the records of ownership and provenance of that item. You can see this with e-books and online courses, where the vendor may have an internal record of whom it belongs, but there's no way for a third party to verify that record independently.
With NFTs, ownership can be automatically verified and proven. NFTs can also represent digital rewards, such as points or badges. This can be done by "tokenizing" them, which means converting them into a token that lives on a blockchain. This means that the points and badges can be transferred and traded, which opens up a new realm of possibilities for things like loyalty and rewards programs.
Decentralized marketplaces for digital goods
Decentralized marketplaces are marketplaces that are designed to operate without a central authority. This means that users are in control of their data and that there is no central authority that can control or change their product listings.
Blockchain-based decentralized marketplaces are an excellent example of how NFTs can be used to decentralize a digital experience. These marketplaces are powered by an NFT, a unique digital asset that can be traded and exchanged.
An NFT could be a song or piece of writing, a photo, or an image. They are used to represent the value of a product in a marketplace. Blockchain technology to facilitate digital assets' distribution, verification, and storage is one of the most exciting ways NFTs can be used. It enables the development of fully decentralized marketplaces, where the users control all data.
Proving the authenticity of digital goods
Authenticity is one of the essential things when collecting items or owning art pieces. If a painting is a forgery, it's not as valuable or precious. Proving an object's authenticity can be a complicated process, and with digital items, it can be even more challenging.
To verify the authenticity of a piece of art, you would usually have to go through a centralized organization, like the artist, or a specialized third-party authenticator. With blockchain technology, you can create a publicly verifiable and tamper-proof record of authenticity.
This record could be stored in a decentralized network, like a blockchain, where it is tamper-proof and challenging to take down or shut down. This is especially useful for artworks and collectables, as they tend to be very expensive, and the owners would want to be able to prove their authenticity if they're selling them for a large amount of money.
With blockchain technology, you can prove the authenticity of a piece of art without going through an authenticated third party.
Tracking the fragmentation of digital experiences
Digital experiences are fragmented across different platforms, including social media, messaging apps, and online marketplaces. This means that every time you log in to one of these platforms, you have access to only that platform and not all others. This fragmentation of digital experiences is because each platform was developed as a siloed product or a product designed to operate independently from other systems.
The rise of social media has led to these siloed platforms becoming more and more powerful, with many users having no choice but to use them. Blockchain technology and the NFTs that it enables can be used to combat the fragmentation of digital experiences.
Creating a decentralized system that enables the swapping and exchanging of information makes it possible for users to access services, news, and content across different platforms. This creates a more seamless and connected experience across other media, as all your data is stored centrally in one system.
NFTs as unique identifiers for digital items
NFTs can be used as unique identifiers for all types of digital items. This means that, instead of using a hash or a unique string of letters and numbers to represent a file, you can use an NFT. This means you can use NFTs to describe anything, from pictures of your latest vacation to a song or a piece of writing. NFTs are useful for referencing files in a decentralized network, like a blockchain.
This means that the file is stored in a public and tamper-proof database instead of a centralized database. This decentralized database is hosted by thousands of computers globally, meaning it is more secure.
NFTs can also represent data bits, such as ones and zeros, in computer code. This opens up the possibility of creating decentralized applications that are genuinely peer-to-peer, where two users can connect directly and don't have to go through a centralized server.
How NFTs can benefit Internet users
The implementation of NFTs is likely to have a wide-reaching impact. It can be used to improve how we exchange and distribute information online, including how users interact with each other, discover content and earn revenue from their work.
Improved information exchange and discovery: NFTs can create more meaningful and personal experiences for users, especially those with rich metadata that can be used to improve search. This is especially true for those who are visually or hearing impaired. Users can take advantage of the blockchain's immutability, providing an "unhackable record of truth".
It can also be used to track and trace the provenance of digital content, making verifying the authenticity of information more accessible. - Better revenue models and monetization: NFTs can be used to create more equitable and inclusive revenue models for content creation and contribution.
This can benefit both professional and amateur creators, content curators, and distributors. - New types of social networks: The implementation of NFTs can solve issues like identity theft, data breaches and impersonation that are common among current social networks. New social networks can be built that are based on NFTs and give users more control over how their data is used.
How are NFTs making the internet ownable?
NFTs are making the internet ownable through a variety of different features. One way this is being done is by using unique identifiers for digital items. This means you can use an identifier unique to that file rather than remembering a URL or file name.
Ownership of digital goods: NFTs are making the internet more ownable by increasing transparency around the ownership of digital goods. With blockchain technology, you can easily track who owns what and see how it has been used or transferred in the past.
Digital rights management is also easier to implement and can be tailored to the needs of each creator or artist. - Provenance tracking: Provenance refers to the "chain of custody" of a good. This means that it's easy to determine where a product came from and who has handled it along the way.
This is important because it can help reduce consumer risk and build product trust. It can also be used to verify the authenticity of goods, especially digital ones such as images and videos.
Decentralized marketplaces: Decentralized marketplaces are another way that NFTs are making the internet ownable. They're a blockchain-based marketplace where users can sell, buy and exchange goods without an intermediary.
The world wide web has become where people are increasingly "publishing their content and contributing to creating shared knowledge and culture". However, the internet is fragmented and disintermediated, with users having limited control over their digital experiences.
NFTs are a type of token that is unique and can be used to represent almost any kind of asset. They're being implemented to make digital goods more ownable, transparent and decentralized.
NFTs provide a new and exciting way of looking at ownership. They enable the decentralization of digital services, experiences, and content, which can be used to create decentralized marketplaces with no central authority, prove digital goods' authenticity and track digital experiences' fragmentation. In doing so, NFTs make their ownable and suitable for users and brands.