To understand why NFTs have become so popular, it’s useful to take a closer look at the technology that powers it.

First of all, NFTs allow trading (buying and selling) in a secure way. In any traditional market, the transaction is not simultaneous, meaning usually you pay money and then get a product (even in a physical market, sometimes you get product first and pay a few seconds later). With NFTs, the transaction happens instantly — the money and NFT are transferred in a single transaction. This is a major innovation #1.

Second, in any market or ecommerce site, the transactions are reversible, meaning I can pay for something on Amazon and if it fails to arrive or arrives in a wrong condition, I can ask a merchant, Amazon or a bank for my money back. With blockchain, transactions can’t be rolled back and can’t be reversed. Likewise, when you pay for a product or service, you don’t always control or own it. For example, opening up most electronics devices will void warranty. In case of software, the company can revoke access, for example your domain, subscription, and so on. On a blockchain, no one — not corporation not a government, can revoke your NFTs. This is called immutability. This is a major innovation #2.

And third, NFTs allow linking your identity with these immutable records. If your wallet has ENS (see above) and you publicly declared your wallet on your social media, anyone can now track your artworks and sales. Think of the fact that in traditional art space, you need to have art experts to try and verify fake from authentic work. With blockchain, as long as this link between your identity and your wallet exists, proving authentic work is seamless and automatic. This is a major innovation #3.

Did this answer your question?