X
    Categories: Accounting

Non Fungible Tokens

Non Fungible Tokens sounds unfamiliar right! Well, let us dive into this topic for better understanding. Basically, non-fungible tokens are digital assets where each such token carries its own unique value and identity. NFT’s exist in the digital blockchain where anyone can view or copy the items, but only the buyer of such NFT carries the official status of being its owner.

Each and every NFT carries its own distinct identity and they are non-interchangeable. The trend of the NFTs has emerged lately where these are purchased and sold for massive amounts.

WHAT IS NFT?

In simple terms, NFT is a digital asset that can be created for any digital content such as music, images, videos, text, etc.

The evolution of NFT has provided a wider platform for artists to sell their art at very fine prices globally.

In this digital era, the popularity of NFTs among people is growing rapidly and it has become a very profitable avenue for artists to mint millions through it.

WHERE ARE NFTs STORED?

NFT being digital assets are stored in a blockchain that is indestructible and cannot get corrupted and which stores the series of all the transactions.

Blockchain plays a very important part in the cryptocurrencies as well such as the Bitcoin Blockchain and the Ethereum Blockchain which is also considered one of the largest blockchains in cryptocurrency. In fact, Ethereum provided a platform for smart contracts which are executed automatically and complete the tasks as per the preset terms stated in the contract.

WHAT IS MEANT BY NON FUNGIBILITY?

Simply defined, nonfungibility means items that cannot be divided or interchanged with the other similar item. For example, one cannot exchange his pet kitten with his neighbors and consider it yours because every kitten has its own distinct entity and cannot be interchanged.

Hence, unlike money which is fungible i.e. the same note of money can be exchanged numerous times and keeps on circulating from one person to another and also which can be divided, non-fungibility means an item that cannot be divided or interchanged.

THE INTERSECTION OF PATENT AND NFT

NFT’s can be applied to Games, Songs, Fashion, Patents, or any digital thing. NFT patents are already here. For example, Nike has obtained a patent for generating cryptographic digital assets for footwear known as Crypto-Kicks.

IPwe and IBM two have joined hands for monetizing patents by trading patents as non-fungible tokens (NFTs) or digital assets. The tokenization of Intellectual Property will help to sell, commercialized, or monetized the patents more easily.

It would be a great opportunity for IP professionals to take advantage of this due to their high-value service, Lawyers will gain more importance in this system.

WHY INVEST IN NFTS?

NFTs in the present times are being traded in very very huge amounts. But the question which arises is why NFTs are being traded globally for such massive amounts?

Basically buying NFT increases the prestige of the buyer in the society as such buyer is tagged as the official owner of that digital art. It is being lately noticed that some people are buying NFTs with an Investment motive as in this advancing digital world, it is expected that the value of NFTs is going to increase.

HOW TO INVEST?

There are various platforms through which one can start trading in NFTs such as Wexchain, Opensea, Atomic Assets, etc.

Henceforth, In the present world where giant companies such as Facebook now renamed Meta, Microsoft is on the path to bringing a massive change in the virtual world through Metaverse, the value of all the crypto chains is bound to increase.

Share your thoughts with us on more such brainstorming tech updates

Write to info@taxreturnwala.com

Team TaxReturnWala: