NFTs are all the rage right now. If you’re reading this, there’s a good chance you know at least something about ‘NFTs’ – or non-fungible tokens. NFTs have been making waves in the crypto world lately as they offer an innovative way to tokenize digital assets. But What problems NFTs are solving that traditional assets can’t? In this post, we’ll take a look at some of the problems NFTs are solving and how they’re improving the crypto landscape. Stay tuned!
What Problems NFTs Are Solving?
NFTs are bringing a new level of excitement to the crypto world and they’re also solving some big problems. Let’s take a look at a few of the issues that NFTs are addressing:
One of the biggest problems that NFTs are solving is the issue of fungibility. With traditional assets, each asset is exchangeable with another asset like 1 bitcoin is exchangeable with another 1 bitcoin. However, this isn’t the case with NFTs. Each NFT is unique and can not be exchanged by any other NFT. This makes them more valuable and helps to address the issue of fungibility.
2. Right of ownership:
NFTs have the ability to represent ownership and identity in a way that other digital assets can’t. This makes them perfect for things like NBA season tickets, which are a valuable asset that someone might want to own. By using an NFT to represent these tickets, it becomes much more manageable to track them. Plus, it delivers a level of authenticity and security that can never be beaten.
NBA Top Shot—which allows users to buy, sell, or trade officially licensed highlights of NBA games in the form of digital collectibles—is a perfect example of how NFTs can provide ownership. Purchasing a highlight as an NFT allows you to own that moment forever. You can even send it to somebody else if you want to.
NFTs could also be used to represent other digital assets, like music files or video games. You could own a digital copy of your favorite song or game and trade it with others. The possibilities are endless!
Another big problem that NFTs are solving is the issue of scalability. With traditional assets, it can be difficult to Transfer large amounts of value due to the limited number of units that exist. However, NFTs don’t have this problem because they’re not limited in supply. This makes them more scalable and helps to solve the scalability issue.
4. Improved Royalty:
NFTs also have the ability to improve the royalty and provenance process. Each NFT is created with a unique ID that is stored on a blockchain smart contract and this ID cannot be changed. This ID is used to track the asset throughout its lifecycle. So, if you create an NFT and then sell it, the new owner will be able to see that you were the original creator. This provides a high level of transparency. Plus, it can help to ensure that creators are properly compensated for their work in every NFT trade.
Another problem that NFTs are solving is the issue of liquidity. With traditional assets, it can be difficult to sell or trade them due to the lack of buyers or sellers. However, NFTs don’t have this problem because they’re easy to sell or trade on decentralized exchanges. This solves the liquidity issue.
6. Play-to-Earn Games:
NFT provide a new type of gaming that is play to earn. In these games, players can earn NFTs by playing the game. These NFTs have a specific value and we can sell these NFTs on any decentralized exchange. This gives an opportunity for gamers to earn for living. Axie Infinity is one of the first play-to-earn games. In this game, players can earn NFTs by playing and then selling them on decentralized exchanges.
By providing a way for players to earn NFTs, it encourages more people to play the game. This, in turn, helps to increase the liquidity of the game.
These are just a few of the big problems that NFTs are solving. If you know more problems NFTs are solving. Let us know in the comment section. If you’re interested in learning more about NFTs, be sure to check out our other posts on the topic. Stay tuned!