NFT AND WEB 3.0.

THE BLOCKCHAIN

TECHNOLOGY AND THE

VALUE OF DIGITAL ASSETS.

Are non-fungible tokens a technology of the future ? We like to think of NFTs in terms of Artificial Intelligence, Machine Learning and Deep Learning technologies. It is clear that NFTs are currently attracting a lot of interest and that they offer several potential advantages. However, this technology is still in its infancy and many challenges remain.

NFT and web 3.0, what is an NFT?

NFT stands for Non-Fungible Token.

Non-Fungible means that it is unique and not replaceable or substitutable. It basically means that something is only interchangeable.

NFT non-fungible tokens, on the other hand, are certificates of authenticity and ownership that cannot be forged, based on Blockchain technology, the same technology that authenticates cryptocurrency exchange transactions.

What is a fungible asset ?

For example, a Bitcoin is fungible and divisible. Therefore, one Bitcoin can be exchanged for another Bitcoin. Crypto-currencies are divisible tokens and therefore available in small units. Thus, one can hold 40% of a Bitcoin. Similarly in the real economy, money is a fungible asset. It is therefore easily exchanged. A 10€ bill against two 5€ bills without loss of gain or value. Moreover, gold and shares are also fungible assets. And there is no limit to their value. In fact, they can be used for payments or to store value.

NFT and web 3.0, what is a non-fungible asset ?

However, an NFT artwork is a non-fungible token. Therefore, it is not possible to exchange it for another piece of art. A non-fungible asset is a unique piece. It is stored on a digital ledger, the Blockchain. Thus each non-fungible token acts as a certificate of authenticity. Moreover, it cannot be modified, adjusted or stolen. Because the fundamental principles of cryptography make the Blockchain unique.

Digital Asset.

A digital asset is anything that exists in a digital format and has a right to use it. In this case the right to copy, duplicate, reproduce, modify and otherwise use. Thus, documents, audiovisual content, images and other similar digital data are digital assets.

NFT and web 3.0, some reminders about the Blockchain.

Blockchain is a type of peer-to-peer electronic database. A series of linked data blocks. And this chain of blocks creates a digital ledger that stores activity and information within the chain. In the background, the backups of this ledger are located on thousands of different servers around the world. This means that anyone on the network can see and verify the entries of everyone else. According to IBM, the Blockchain is a shared and immutable ledger, permanent and unalterable, which facilitates the process of recording transactions and tracking assets.

How NFTs work on the Blockchain ?

NFTs depend on the Blockchain technology. Most NFTs are part of the Ethereum Blockchain. And Ethereum is a cryptocurrency like Bitcoin or Dogecoin. Besides, the Blockchain is a decentralized, transparent and secure information storage technology.

NFT and web 3.0, the emergence of NFT.

Non-fungible tokens are an evolution of cryptocurrencies. For NFTs are the digital form of an offline item which is a revolution.

The value of NFTs.

A non-fungible token, NFT is above all a certificate of ownership of a digital asset. It has value because it is an asset that can be collected. Moreover, affects play an important role at the time of its acquisition.

NFT and web 3.0, NFT buyer.

You can invest in NFTs. They are a source of speculation.

Seller of NFT.

NFTs are a disruptive innovation in the art market. As a result, today’s artists can monetize their works through NFTs. So every artist has the possibility to get commissions on the digital resales of his works.

It is also a good promotional support for the artists. For example, Nyla Hayes, who is only 12 years old, is known for her works Long Neckie Ladies or Benyamin Ahmed who won and pocketed 340.000 euros with his digital images of whales.

NFT and web 3.0, the advantages of NFT.
  • NFTs give creators ownership of their digital assets. When content creators create a digital asset, an NFT allows them to not only demonstrate authenticity, but also to profit from their work.

  • What makes this type of digital asset unique is that it can be collected. Many people enjoy the excitement of collecting a unique or rare item. NFTs meet this demand. And they give additional legitimacy to collectible content, especially in the form of digital assets.

  • They are immutable. Non-fungible tokens are based on the Blockchain. Therefore, they cannot be modified, deleted or replaced. Thus to prove the origin or authenticity of a digital content, the quality of NFTs is valuable.

  • In addition, NFTs can include smart contracts. Smart contracts are another feature of Blockchain technology. Namely, they can store instructions that are executed when the contract meets certain conditions. Thus, an NFT with a smart contract gives content creators a percentage of the profit when the NFT sells in the future.

The disadvantages of NFTs.

Clearly, NFTs are no exception to the paradigm of new technologies. For nothing certifies that it will take root and last in the consumption habits of our future societies.

  • NFTs are in a speculative market. So we wonder about its real speculative value. Is it a long-term investment ? Or is it just a passing fad ? Nothing is certain. Because up to now the emotional quality of NFTs is their only speculative value.

  • On the one hand, it is not because one owns the NFT of a digital asset that copies of it do not exist. Obviously, this possession is a guarantee of the authenticity of the asset. However, one does not control this same asset. Because digital artworks are copied and pasted, videos are published on various websites etc.

  • On the other hand, we are all more or less aware of the environmental impact of Blockchain-based cryptocurrencies, such as Ether or Bitcoin. We can ask ourselves until proven otherwise if this type of asset is sustainable. Because, everything evolves and changes very quickly.

  • And while the technology behind NFTs is relatively secure, many exchanges and platforms are not. For example, there are several cases of NFT theft reported here and there after cybersecurity breaches.

NFT and web 3.0, the first areas of intervention of NFT.
  • Digital art,

  • video games: Axie Infinity is a video game that includes NFT,

  • music

  • Ethereum

  • finance

  • sports

  • Fashion and luxury : Louis Vuitton wants to be able to use NFT to stop its counterfeiting…

Some NFT platforms.

Non-exhaustive list of platforms for the NFT market :

  • OpenSEA

  • NFTically

  • MetaMask

  • Rarible

NFT and web 3.0, examples of NFT sales.

Art is a good field of application for NFTs. Thus in February 2021, the digital artist Beeple sells the NFT of his work Everydays-The First 5,000 Days through the auction house Christie’s. Amount of the transaction, 69.3 million dollars.

  • Twitter founder Jack Dorsey sells the NFT of his first Tweet for $2.9 million.

  • A baby bites his brother’s finger. His Charlie bit me video accumulates more than 800 million views on YouTube. And the NFT of the video sells for about 700,000€.

  • A first for an artist from France. The French rapper Booba launches from 03 to 08 November 2021 for the release of his track TN, an NFT including five digital cards, a preview access to the clip and a draw to win a VIP access to his concert at the Stade de France on 03 September 2022. Result : more than 564.000€ of sales.

  • The NFT of the colored GIF Nyan Cat sold for 561,000 dollars.

Examples of the scope of the NFT.
  • Game tickets. The creation of event tickets based on non-fungible tokens traces the life of the ticket. Namely possible exchanges, resale, thefts or forgeries. Because the ticket is definitely unique on the Blockchain.

  • Fashion. Also here, the non-fungible token attests to the authenticity of the product. Moreover, NFTs can intervene in the traceability of products from the manufacturer to the retailer. And thus work for a much more ethical fashion. Adidas announces its first collection with NFT while Nike buys RTFKT, a digital fashion start-up.

  • Collectibles. Collectors can now give free rein to their passion. With NFTs, the items they find online are safe and authentic.

  • Video games. Whether it’s for pure pleasure or for a real need to be more competitive, gamers can own unique items in a game thanks to NFTs. Moreover, these digital tokens are potential resources for the gaming ecosystem.

NFT and web 3.0, brands position themselves in web 3.0.

The Italian luxury fashion house Dolce Gabbana announces that it wants to federate an NFT DGFamily community around its web 3.0. In September 2021, Domenico Dolce and Stefano Gabbana created their first NFT Collezione Genesi collection, which was a real success with consumers. It also generated more than 5.65 million dollars in revenue. The brand is then confident in its strategic direction. Dolce Gabbana is considering new collaborations with UNXD. It is the specialized marketplace that ensures the marketing of the NFT Collezione Genesie.

NFTs conquering museums.

After the world of art, luxury and sports, museums are succumbing to NFTs. The Uffizi Gallery in Florence, the Hermitage in St. Petersburg, the Belvedere in Vienna are already in the wake of NFTs. Now the British Museum is answering the call with watercolors by British painter William Turner and super rare editions. This is an attempt to make up for the 97% drop in revenue between 2020 and March 2021.

NFT and web 3.0, NFT and the metaverse.

The Sandbox metaverse is the focus of all the attention. Because it is a virtual world where everything revolves around Blockchain, NFT and virtual real estate. Many brands, retailers and celebrities already own their virtual plots. More and more companies see this concept as the future of the Web. The web 3.0.