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QuarkMing202

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NFT, the passport to Web3

#Web334
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The text discusses NFTs (Non-Fungible Tokens) as a crucial component of Web3, alongside cryptocurrencies and DeFi. NFTs provide unique digital certificates recorded on the blockchain, establishing ownership of digital or real-world assets. Unlike cryptocurrencies, which are interchangeable, each NFT has distinct attributes. Key applications of NFTs include: 1. **Digital Art and Collectibles**: NFTs enable digital artworks to gain scarcity and collectible value, exemplified by Beeple's artwork sold for $69 million. 2. **Gaming and Virtual Items**: In blockchain games, players truly own their in-game assets as NFTs, allowing for trading on secondary markets. 3. **Identity and Social Media**: Unique NFTs, like CryptoPunks, serve as digital identities, with some fetching high prices. 4. **Metaverse and Virtual Assets**: NFTs represent ownership of virtual properties and items in the metaverse, ensuring users have control over their digital spaces. 5. **Membership and Tickets**: Brands like Starbucks use NFTs for exclusive memberships, providing unique benefits and trading value. 6. **Real-World Applications**: NFTs are being explored for real-world assets like degrees and real estate, offering transparent ownership verification. Currently, the NFT market is experiencing a cooling period, with minimal growth projected. Ethereum remains the dominant platform, while regulatory uncertainties and speculative trends pose challenges. Despite this, NFTs hold significant potential as tools for establishing ownership in the digital realm and bridging the gap between digital and real-world identities.

We talked about cryptocurrencies in Web3 and DeFi, and some people say that after all this talk, it's still just about trading coins, that there’s nothing else in Web3? Of course, there is. Next, let's look at another important component of Web3—NFTs.
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  1. What is NFT

We say that Web3 is centered around blockchain, cryptocurrencies, and NFTs, beginning to build a new internet world that returns ownership to users. Now, I ask everyone, what does this ownership refer to?

Imagine that in the traditional internet, images, videos, music, and files are everywhere, and you can easily copy, paste, and download them with just a finger's touch, to the point where we have forgotten that ownership even exists. NFTs are here to solve this problem. NFT, Non-Fungible Token, is a unique digital certificate recorded on the blockchain that can provide proof of rights and ownership for assets in the digital or real world.

Unlike cryptocurrencies, which emphasize "fungibility" (for example, one Bitcoin can be exchanged for another Bitcoin), NFTs emphasize "non-fungibility," where each NFT has unique attributes and cannot be exchanged for one another.

  1. Core Applications of NFTs

Let's take a look at its specific applications:

  1. Digital Art and Collectibles

Look at this painting; it is a work by the famous American digital artist Beeple. He collaged 5,000 digital images he created daily into one piece, minted it as an NFT, and sold it for $69.3 million at Christie's. The emergence of NFTs has broken the dilemma of digital works being easy to copy and difficult to prove ownership, giving digital art scarcity and collectible value.

  1. Games and Virtual Items

In traditional games, players' equipment and characters belong to the game company, while in blockchain games, items like characters, weapons, and skins can exist in the form of NFTs, allowing players to truly own these virtual assets and trade them freely in the secondary market.

  1. Identity and Social

You may have seen those uniquely styled pixel avatars on social platforms, like CryptoPunks. They are not just a type of NFT collectible but also a symbol of digital identity, with some people even willing to pay hundreds of thousands of dollars for a rare avatar.

Many celebrities and brands also establish closer connections with fans by issuing limited edition NFTs, where holders can gain exclusive interactions, membership privileges, offline events, and more.

  1. Metaverse and Virtual Assets

In virtual worlds like the Metaverse, land, buildings, and virtual clothing can exist in the form of NFTs. Users can buy, display, and trade these virtual assets, with NFTs acting as "property certificates" for these virtual assets, ensuring users have actual control over digital spaces. Moreover, property records are permanently stored on the blockchain and cannot be tampered with.

  1. Membership and Tickets

Starbucks has launched an NFT-based membership system, where users only need to hold specific NFTs to unlock exclusive events, receive customized drinks, and participate in brand community interactions. This membership NFT not only allows users to enjoy unique benefits but also possesses collectible and trading value due to its scarcity, with some limited edition NFTs even selling at a premium in the secondary market.

We know that traditional membership cards and tickets are often one-time and non-transferable, but NFT certificates have verifiable and transferable characteristics, which can be used to prove identity and access specific content or events. Besides Starbucks, many brands, concerts, and sports events have also begun issuing digital tickets through NFTs, allowing holders to enjoy exclusive rights, and even after events, these NFTs can be kept or sold as digital souvenirs. NFTs are transforming the relationship between brands and users from one-way consumption to two-way interaction, expanding new boundaries in digital identity and membership management.

  1. Real World

NFTs are not limited to digital assets; they are also entering the real world to solve property rights and trust issues. For example, academic certificates and real estate. NFTs serve as digital certificates for degrees and professional certifications, possessing tamper-proof and verifiable qualities, with many educational institutions beginning to experiment with their application. The real estate industry is also exploring property registration through NFTs to provide a more transparent and convenient trading method for buyers and sellers.

  1. Current Development Status of NFTs

Although NFTs have landed in multiple fields, the current development has entered a cooling period compared to the early market frenzy, mainly reflected in the following aspects:

  1. Market Data: The market value in 2023 is $19.39 billion, and the current market value in 2025 is $19.68 billion, showing little growth.

  2. Industry Landscape: Ethereum still dominates the NFT market, followed closely by Bitcoin, Solana, and Polygon. In terms of platforms, Blur ranks first, with Opensea seeing an increase in trading volume after announcing TGE, ranking second, and Magic Eden third. Leading NFTs still maintain absolute market share, such as BAYC and CryptoPunks.

  3. Compliance Issues: There is still no conclusion on whether NFTs are securities, similar to the issues faced by cryptocurrencies. Most projects stop managing their NFTs after issuance, with the project's tokens having no relation to the project itself, and the project's earnings having no connection to the token's value. SEC regulation of tokens prevents quality projects from assigning any actual value to tokens, as once value is assigned, they would be classified as securities.

  4. Lack of Speculation: In the current environment, with most cryptocurrencies and NFTs lacking value, people are more inclined to chase high-volatility, high-risk memecoins rather than low-liquid NFTs.

Regarding the future of NFTs, as one of the only two asset types that have emerged, I believe NFTs still hold enormous potential. Regardless of how the industry evolves, NFTs, as tools for proving rights to digital assets and as passports in the Web3 world, connecting the digital and the real, identity and value, will undoubtedly bring about more new possibilities.

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