The Future of NFTs and Blockchain: The Digital Asset Market...

NFTs are an important part of the digital asset market, where blockchain plays a central role in authenticating ownership, trading, and protecting asset value (Illustration photo)

NFT and Blockchain: The Foundational Structure

NFTs are non-fungible tokens that represent unique digital assets. The biggest difference between NFTs and other tokens like Bitcoin or Ethereum is their non-fungibility: each NFT has its own value and cannot be directly exchanged. NFTs are built on the blockchain platform, which helps authenticate ownership and ensures transparency and security of transactions.

Blockchain provides a trusted infrastructure for NFT transactions to take place securely and irreversibly. When a digital asset is transferred as an NFT, all information about its ownership and transactions is permanently stored on the blockchain, helping to protect the rights of the owner and create transparency in the market.

The Growth Potential of NFTs in Virtual Art, Music, and Real Estate

NFTs have ushered in a new wave in the art industry, especially digital art. Artworks no longer exist only in physical form but can be digitized into NFTs and traded directly on platforms like OpenSea. This allows artists to access a global market without going through intermediaries like traditional galleries or auction houses. NFTs not only protect copyright but also help artists retain most of the value of their works when trading.

A prominent example is artist Beeple's artwork, "Everydays: The First 5000 Days", which sold for $69 million on the Christie's platform via NFT, marking a major milestone for digital art.

The collection of 5,000 works titled “Everydays: The First 5000 Days” is “one of the most unique works to appear in the history of digital art.” (Source: AP)

In the music industry, NFTs have also created new opportunities. Instead of releasing music through traditional platforms like Spotify or Apple Music, artists can now release albums, songs, or other exclusive musical works as NFTs. This allows artists to not only control the ownership and distribution of their products, but also create opportunities to earn income directly from fans.

For example, rapper Snoop Dogg released his album as an NFT, allowing him to maintain full control over the distribution and sale of the product. This is a novel model that offers many benefits to artists and fans.

NFTs are also changing the way real estate is transacted, especially in virtual spaces like Decentraland or The Sandbox. Virtual plots of land in these metaverses can be bought, sold, and traded as NFTs, and owning these properties is no different than owning a real piece of land. These properties can be built, developed, and traded like physical real estate.

A prime example is Decentraland – where users can buy virtual land, build structures, and earn profits from transactions. Virtual real estate is attracting a large number of investors, especially in the context of the development of metaverses.

Challenges for NFTs and Blockchain

Despite a lot of potential, the NFT and blockchain market still faces many major challenges (Illustration photo)

One of the biggest problems is the volatility of NFTs. With many people entering the market as an investment opportunity, the value of some NFTs can change very quickly, causing instability and increasing speculation in the market. Works of art or virtual assets can be very valuable at one point but then drop sharply in a short period of time, putting investors at great risk.

While blockchain helps secure transactions and ownership, the NFT market still has risks of fraud, especially the copying and distribution of works without the consent of the author. Some cybercriminals may create copies of artworks and sell them as counterfeit NFTs. Therefore, there is a need for control measures and protection of the rights of artists and buyers.

Another challenge for NFTs is their negative environmental impact. Many blockchain platforms use proof of work (PoW) to confirm transactions, which consumes a huge amount of energy. PoW is a consensus mechanism used in blockchain to verify and record new transactions in a secure and decentralized manner. While some platforms have moved to more environmentally friendly solutions, this is still a major issue that needs to be addressed if NFTs and blockchain are to grow sustainably.

NFTs and blockchain are opening up huge opportunities for owning and trading digital assets, from art to virtual real estate. However, for this market to grow sustainably, improvements in regulation, security, and minimizing negative environmental impacts are needed. If these issues are addressed, NFTs are likely to continue to become an important part of the global digital economy, ushering in a new era of wealth and ownership.

Source: https://baodaknong.vn/tuong-lai-cua-nft-va-blockchain-thi-truong-so-hoa-tai-san-va-quyen-so-huu-251835.html