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QuarkMing202

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NFT, the passport to Web3

#Web323
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The text discusses NFTs (Non-Fungible Tokens) as a crucial component of Web3, alongside cryptocurrencies and DeFi. NFTs are unique digital certificates recorded on the blockchain, providing proof of ownership for both digital and real-world assets. Unlike cryptocurrencies, which are interchangeable, each NFT has distinct properties. Key applications of NFTs include: 1. **Digital Art and Collectibles**: NFTs allow digital artworks to have scarcity and collectible value, exemplified by Beeple's artwork sold for $69.3 million. 2. **Gaming and Virtual Items**: In blockchain games, players truly own their in-game assets as NFTs, which can be traded in secondary markets. 3. **Identity and Social Media**: Unique NFTs, like CryptoPunks, serve as digital identities, with some individuals willing to pay significant amounts for rare pieces. 4. **Metaverse and Virtual Assets**: In virtual worlds, NFTs represent ownership of digital land and items, ensuring users' control over their virtual spaces. 5. **Membership and Tickets**: Brands like Starbucks use NFTs for exclusive memberships and events, enhancing user engagement and offering collectible value. 6. **Real-World Applications**: NFTs are being explored for real-world assets like educational credentials and real estate, providing transparency and trust. Despite the initial hype, the NFT market has cooled, with modest growth projections and ongoing regulatory uncertainties. However, NFTs remain a promising asset type with potential to bridge digital and real-world identities and values.

We talked about cryptocurrencies in Web3 and DeFi, and some people say that after all this discussion, it's still just about trading coins. Is there 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 an 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 flick of your finger, 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 solely to the game company, while in blockchain games, items like characters, weapons, and skins can exist as NFTs, allowing players to truly own these virtual assets and trade them freely in secondary markets.

  1. Identity and Social

You may have seen those uniquely styled pixel avatars on social platforms, like CryptoPunks. They are not just NFT collectibles; they symbolize a digital identity, and some people are 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 enjoy exclusive interactions, membership privileges, offline events, and other benefits.

  1. Metaverse and Virtual Assets

In virtual worlds like the Metaverse, land, buildings, and virtual clothing can exist as 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; some limited edition NFTs are even sold at a premium in secondary markets.

We know that traditional membership cards and tickets are often one-time and non-transferable, but NFT certificates have verifiable and transferable characteristics, allowing them to prove identity and access specific content or events. Besides Starbucks, many brands, concerts, and sports events are also starting to issue digital tickets through NFTs, where holders can enjoy exclusive rights, and even after the event ends, 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, such as academic certificates and real estate. NFTs serve as digital certificates for degrees and professional certifications, possessing tamper-proof and verifiable qualities, and many educational institutions have begun to experiment with their application. The real estate industry is also exploring property registration through NFTs, providing a more transparent and convenient transaction 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, and Opensea has seen an increase in trading volume after announcing TGE, ranking second, with Magic Eden in third. Leading NFTs still maintain an 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. The vast majority of projects, after issuing NFTs, no longer manage them, and the project's tokens have no relation to the project itself; the project's earnings have no connection to the token's value. SEC regulation of tokens prevents quality projects from assigning any real value to tokens, as once value is assigned, they will 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-liquidity 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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