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NFT- Future of Finance ?

I made a million selling nfts

Sounds great doesn’t it. Although I didn’t make a million selling a nft but someone did. I am sure you must have heard or read about a person who became a millionaire just buy buying and selling nfts. You must’ve thought to yourself there has to be a catch to it , this cant be true but that isn’t the case. Someone did pay $6.6 million for a video by Beeple or like Logan Paul who earned an enormous profit by selling his – A World of Women piece for 200 ETH ($765k).

                        So, what’s a NFT ?

Any Non-Fungible token are cryptographic asset stored on a blockchain or a digital ledger which aren’t exchangeable because each of them have their own value. Which make them different from cryptocurrencies or physical money. NFTs have shifted the crypto architype since each NFT is unique and irreplaceable making it very challenging or impossible to compare NFTs with each other. Things which you need to know is the NFTs are cryptographic items stored on blockchains which cant be replicated. NFTs are also used to represent real world items such as digital artwork and real estate.

NFTs are a little similar to Bitcoin and Ethereum or any other cryptocurrency. But what makes a distinguish from it from cryptocurrency or physical money is the fact that almost every NFT is non-interchangeable . This where the word Non-fungible starts to make sense .You can create a NFT with , well anything which can be stored on a digital ledger and since it is non-interchangeable it elevates above any physical or cryptocurrency and brings it in the realm of virtually everything.

 Why are NFTs the future:

The director Head of Crypto Currency UK , Nawab Hussain in an interviewed shared a fact that NFT markets have already surpassed the phase of them being just a place for artist to create and share their artwork . NFTs are becoming to a much larger economy. In spite  the fact that NFT space is still in its infancy he believes that within 5 years there will be a vast expansion in the financial world revolving around NFTs.

NFTs can create opportunities for new business models which haven’t existed before . For example , NIIO art is demonstrating their owned digital artwork. Whenever a person buys or borrows their artwork from their platform they can display it on a screen in the knowledge that there is no issue of copywrite or originality as the blockchain ensures that. Likewise the modern financial system consists of sophisticated trading and loan systems for different asset types , ranging from real estate to lending contracts to artwork. By introducing digital representation of those physical assets -NFTs are a step forward in the reinvention of this pre-existing infrastructure.

 NFTs x Finance :

Financial NFTs include everything from insurance to bonds , to baskets of unique tokens and tokenized real world assets marking them a roadmap to become the largest single use of NFT technology so far. There are a variety of ways NFTs have already begun to be utilized for financial purposes which includes: Investments contracts being programmed into NFTs by Solv Protocol for improving the transparency and transfer of project tokens .

NFTs are set to capture a large portion of value in decentralized finance (DeFi), a sector which has seen to have a rapid growth with a valuation already around $60 million. The rise of decentralized finance has whipped the NFT industry into a money printing machine . With the rising platforms it makes it easier to trade and speculate digital art as some platforms give you extra cryptocurrency tokens to trade while others allow you to buy fractions of NFTs. Like a Singapore based -NIFTEX allows NFTs to be fractionalized into thousands of fungible tokens, meaning instead of buying a full crypto art you can buy a fraction of the same artwork and trade it on Uniswap , a decentralized exchange. Also the most significant benefit of NFT is efficiency. The transformation of a physical asset to a digital one streamlines the process and removes intermediaries.

Basically Defi is a upcoming financial technology based on the secure distributed ledgers similar to those used by cryptocurrency. Defi removes the control of banks and financial institutions have on money , financial products and financial services. Currently the world of DeFi makes it exceptionally easy to earn returns on fungible tokens. The NFT world and DeFi have started to come together in a number of interesting ways.

Firstly are the NFT backed loan- There are certain Defi applications which allow you to borrow money by using NFT as collateral. Secondly they can be used to fractionalize the physical assets , such as artwork or real estate.