Understanding NFTs and How They Fit Into the Future of Cryptocurrency
NFTs are currently experiencing a surge of interest, with a growing recognition of their potential impact on the crypto ecosystem. The purpose of having a Non Fungible Token over a Fungible Token is the ability to own an NFT irrespective of the type of asset it represents. Whether tangible or non-tangible, an item connected to an NFT can be bought and sold in the market with guaranteed authenticity and complete uniqueness. There is no need to worry about fakes or scams, as every type of NFT can be traced back to its owner or the original issuer.
How are NFTs Built, and What Are Their Features?
Almost all NFTs are built with two types of Ethereum Token standards: ERC-721 and ERC-1155. These standards help create the token blueprints onto which software developers deploy NFTs. The developers are also responsible for ensuring that the tokens are crypto compatible, making them easily exchangeable and tradable throughout the vast crypto ecosystem.
As far as the features of NFTs are concerned, they are non-interoperable and indivisible. NFTs exist as one whole item and cannot be divided into smaller denominations, so no two people can own an NFT in fractions. While this enhances security, it limits usability and flexibility. Finally, NFTs are indestructible.
Some Existing Hurdles in Creating NFTs
The use cases of NFTs are unlimited; a list of potential uses would take up the entire space of this article. Despite all the possible use cases, the potential power of NFTs has yet to be fully appreciated, and wider application of the technology has been limited.
One important reason for this is the high price of NFT creation. There are several marketplaces that provide a platform to create and trade NFTs, including OpenSea and Rarible, but in general NFT creation fees have remained prohibitive.
In addition to the cost of creation, there are three core challenges to the future of NFTs: regulatory structures inhibiting their adoption, a lack of infrastructure, and user experience issues. The community requires a simple to use NFT creation and adoption platform that can overcome these challenges at cost-effective fees.
With 2021 hyped as the breakthrough year for the NFT market, the challenges of creation cost, a lack of flexibility, and indivisibility have so far limited their impact on the crypto industry.
The Diverse Use Cases of NFTs in the Crypto Space
Although the integration of NFTs in the crypto space is still at a nascent stage, the community has already devised multiple ways to leverage them. For example, NFTs can replace printed artworks with digital versions, doing away with the concept of preservation. In addition, these innovative assets can help protect the intellectual property rights of creators and secure their transactions through the blockchain.
While delivering on these aspects, other NFT-enabled platforms experience lags and charge high fees. Syscoin offers solutions to these problems, and is set to change the way users interact with NFTs.
In the future, the usability of NFTs may extend beyond collectibles and games towards tokenizing other types of physical assets. Any physical item could be converted into a digital asset, and information on paper can be stored in the form of an NFT, from a simple contract or an asset-backed lending instrument to complex insurance paperwork.
Smarter Alternatives to Existing NFT Platforms
While NFTs have several use cases, these future-ready assets are encountering significant challenges around their high creation cost and lack of interoperability. Syscoin provides a powerful alternative. Powered by Z-DAG technology, Syscoin NFTs deliver high performance and efficiency, enabling blazing-fast NFT creation. The platform is also light and future-proof, making it easier to create, comply, and scale NFT creation at lower costs.
One of the primary benefits of using Syscoin for NFT creation is divisibility. These NFTs are light, as the token identifier on Syscoin requires just 4 bytes as opposed to 32 bytes on other platforms. Syscoin has built a system for the instant sharing of fungible tokens, and is one of a group of forward thinking platforms helping to make NFTs more affordable and usable.
With NFTs set to make a profound impact on the crypto world and beyond, Syscoin is in the vanguard of efforts to overcome the challenges that have limited widespread NFT adoption. Syscoin makes user NFT creation simpler and more affordable, making a major contribution to the industry’s attempts to harness the power of NFTs for a wider range of applications.