Decentralized technologies, including blockchain, have revolutionized the existing business models. Before the advent of blockchain, people relied on a time-consuming and costly centralized system to enter into a contract with another party they don’t know inherently. The continuous advancement of blockchain technology has brought innovative concepts such as cryptographic tokenization; NFTs.
NFTs are unique tokens that represent ownership of digital assets and tokenized versions of real-world assets. Non-fungible tokens are hailed as a solution for digital collectibles like Bitcoin is an answer to digital currencies. In this article, we will explore NFTs through a precise definition and the leading features of an NFT marketplace.
What are NFTs?
An NFT (non-fungible token) is a unique cryptographic token representing various digital and physical items such as virtual painting, gaming items, tweets, sneakers, flight tickets, and even university degrees. With NFTs, owners of these physical and digital assets can configure the desired object, issue, share, and trade conveniently on any desired device. The buying and selling process occurs across an NFT marketplace, where owners are first required to prove their ownership for a specific item and validate items’ authenticity. This way, buyers get a guarantee about the reliability of the items they are buying.
What are the features of NFTs?
NFT marketplace functions are similar to an e-commerce store. It requires an intuitive and attractive front-end storefront to display information about the file. The administrator must determine what information is necessary to display so that NFT buyers can understand the source and authenticity of their files.
NFT marketplace should offer search options and category management features to find the collectibles they want to buy. Use a search bar to enable a quick search by adding relevant categories on the site.
Filters or search filters enhance the user experience. The marketplace administrator must think from different buyers’ perspectives since a person utilizing NFTs as an investment has different criteria than digital collectors. Users should be allowed to sort items through categories such as cost, artist, scarcity, etc.
The NFT marketplace must allow users to list the NFTs they want by uploading files and filling in details like name, tags, description. The listing process needs to be easy to understand and the step-by-step path that avoids confusion among new buyers and sellers. Both buyers and sellers on NFT marketplaces also want information such as how many people have viewed their NFTs or the status of their listing.
Buying and auction
The buying and auction feature provides real-time details about the bids and allows them to bid on their preferred NFTs. The value for popular NFTs can raise and frequently change due to robust competition. Thus, having complete information on the auction and bid expiration is the best means to deal with fluctuations.
An NFT marketplace should offer a wallet that allows users to buy, sell, and store NFTs. The marketplace can support wallet integration to connect the user’s existing wallet with the marketplace for higher convenience.
Ratings are a crucial element both for the buyers and sellers. A higher rating represents the strong reputation of any business, and it encourages people to invest in that particular business. The rating system prevents false representation of a transaction before the smart contract executes the agreement.
Use cases of NFTs are endless, beyond gaming and digital arts, which creates excellent opportunities for worldwide enterprises. If we look back to the history of NFT, its transformation is incredible, from crypto kitties and in-gaming collectibles to decentralized finance. DeFi sectors utilize NFTs to commercialize digital products and services, resolve collateralization, store the ownership value, and many other uses. Thus, NFTs have becomevital for revolutionizing most global industries, and thus it continues to gain overwhelming popularity.