Non-fungible tokens have become the main trend of the crypto industry in 2021. The fabulous cost of crypto-art items and the hype around this phenomenon brought NFT beyond the industry – non-fungible tokens began to be used everywhere. Famous auctions sell NFT art objects, and gamers around the world earn crypto on NFT games. At first glance, everything looks large and promising. But will the future of NFT be just as bright, or will public interest fade away as quickly as it appeared?! We will discuss this topic in this article.

What is NFT and why so much noise?

NFT (non-fungible token) – a type of cryptographic token, each instance of which is unique and cannot be exchanged or replaced by another similar token. A non-fungible token is a digital item that has a cryptographic certificate that may be transferred using the same process as cryptocurrencies.

The NFT hype is purely psychological. Humanity now has a means of asserting its ownership of a specific piece of public property, thereby broadcasting purchases to the entire planet. It is simple to see how speculation in non-fungible tokens is an attempt to play on our vanity.

NFTs can serve as a means of claiming ownership of a digital object or work, as well as a kind of virtual exhibit — a digital token’s features allow it to hold information about a piece of art’s history indefinitely and gain value over time.

NFT in the legal system

We live in a world where each state has its own legal system and clear procedures for fixing property rights, which have been formed over the centuries. How is the issue of ownership of NFTs regulated from a legal point of view? The answer is simple: no way. Today, neither the process of creating nor buying and selling tokens is regulated by law.

Based on the essence and purpose of tokens, NFT can be conditionally considered as a “legal document” for a particular object. But here there is a certain conflict. The right of ownership includes the right of the owner/possessor to own, use and dispose of material objects and excludes the possibility of exercising the rights to this object by other persons. Roughly speaking, ownership is a monopoly on a thing.

NFT technology does an excellent job of verifying ownership

Tokens are issued on the blockchain, which means that all information about the issuance of a non-fungible token is stored decentralized, in distributed ledger systems, it is publicly available and cannot be changed. The blockchain contains all information about a certain non-fungible token and an object of the real or virtual world “associated” with it.

At the same time, each such token is controlled by a specific address in the blockchain and can only be moved between addresses by the owner of the address or a person authorized by it. However, according to buidlbee.com, it becomes clear that NFT technology offers enormous potential for the purpose of proving ownership of any asset in the physical or virtual world because such tokens are distinct, non-fungible, and exist in a single copy, information on each of them is publicly available, kept on the blockchain, and cannot be faked.

But despite the fact that you fix the ownership of the original thing, any user can still download or distribute copies of this object on the Internet. Although their address on the blockchain will be different, the work can be replicated and made public. That is, the possession of a digital object actually exists, but it is impossible to control the distribution of its copies.

Copyright protection

There is no understanding in which jurisdiction this or that NFT sale and purchase agreement is valid and which court to apply in case of disputes to protect their rights. Thus, the issues of legal regulation of NFT should be resolved in a comprehensive manner so that, on the one hand, not to stop the development of this industry, and on the other hand, to build the protection of the rights of each person to objects of their property.

Prospects for NFTs

Today, NFT technology has great potential and good prospects. On the one hand, the advantages of the technology, the current popularity of non-fungible tokens and the growth rate of the industry indicate a high interest from users. People’s consumption of digital content is growing daily, which can provide NFT art with a chance to develop in the future. In addition, the convenience that the NFT sphere offers in terms of ownership of material objects also serve as an occasion for detailed study and development of tokenization.

On the other hand, at the moment there are a number of issues in the industry: there is no legal regulation, the market structure and specific ways of implementing the technology are unclear. All this makes it impossible to accurately state the direction of further development of the NFT. The possibility that the rapidly growing popularity of NFTs may fade as quickly as it appeared, and the NFT market may disappoint users, should not be dismissed.

Well, only time will tell if the technology will be massively distributed and generate innovative directions and applications. But in any case, such tokens have become a good impetus for the popularization of their creations by many artists, an interesting experiment for users and an impetus for the development of the entire crypto industry.

Conclusion

This year saw a real boom in NFTs, and they began to skyrocket in value. The prices of some NFTs, which are a digital object such as an image, video, or even the ground in virtual worlds, have risen very rapidly in the past year. At the same time, no physical objects changed hands. You can relate to this in different ways, but one thing is already obvious: the world has received a new toy, a new “pyramid” – and all this is thanks to Ethereum and the blockchain created on its basis.