How NFTs are changing the future of ownership
Where do NFTs come from?
The concept of non-fungible digital assets have actually existed for quite a while; our social media handles, inboxes, and exclusive in-game items are some of the examples. However, we’ve never really gotten to own those assets: ultimately, almost all of our online content is controlled by service providers like Instagram, Gmail, Twitter, etc.
Think about it – what we have now with those digital assets is something more akin to permission. You use or showcase your content only in specific contexts and platforms, and a centralized authority has the discretion to take your ownership away at any time. For instance, while you may appear to have the exclusive ability to use a certain handle on Twitter, Twitter still reserves the right to ban or delete this account.
NFTs present a working solution to this problem.
Why is digital ownership important?
Simply put, when you spend money on an asset, you want to be able to enjoy it to the fullest extent and utilize it as you please. This includes being able to lend it out or even sell it. All of this should happen without having to worry about the possibility of your asset being taken away, or your enjoyment being disrupted.
Currently, non-tokenized digital assets do not allow you to do this. You aren’t allowed to sell in-game items for actual money (unless you do it through an underground market, with a high risk of fraud). You don't own the music you listen to in Apple Music or Spotify.
Non-tokenized assets lack a unified mechanism that allows for such transactions to take place, effectively locking value to the owners of the platform they originate from.
Technically, how do NFTs solve the issue of ownership?
NFTs are engineered in a way that allows them to be transferred freely.
Tokens comply with unified standards (ERC-20, ERC-721, ERC-1155) across public blockchains. This in turn allows NFTs to be easily transferable and interoperable across different digital wallets, ecosystems, and marketplaces. What this means is that you are free to buy, sell or trade your NFTs as you wish across multiple platforms.
The possibilities are endless. You could easily purchase a piece of digital art on Rarible, and subsequently, be able to display it in parcels of virtual land you bought from another online platform.
How is ownership proven in the context of NFTs?
Thanks to the information available on the public blockchains that tokens are traded on, ownership is immutable and provable. These unmodifiable online ledgers make it easy to view the provenance of a particular token, and who its current owner is.
Each NFT has individual characteristics that make it unique from others that are written into the blockchain, so forgery is technically impossible. Even if the title or content might look similar visually, you can always check an NFT's authenticity just by looking at its characteristics in the blockchain browser.