NFTs, Web3 Domains & Benefits
What is an NFT and how do they work?
You may have heard the term “NFT” from your friends or the news, but what exactly is it?
“NFT” is an acronym for non-fungible tokens. Non-fungible tokens are one-of-a-kind digital assets that are stored on a blockchain. Something that is “non-fungible” is unique and cannot be replaced with something else, like a one-of-a-kind painting or a passport. This differs from “fungible” items, like a dollar bill or piece of gold, which are easily replaced by another identical item.
Each NFT contains distinct identification codes and metadata that distinguish them from each other and cannot be replicated, removed or destroyed. In order to record an asset on a blockchain, it needs to go through the process of minting. When a digital asset is minted on the blockchain, a non-fungible token representing ownership is created and stored in your crypto wallet. NFTs are then able to be tracked and verified by the network, making them secure and difficult to forge. NFTs provide a certificate of authenticity and proof of ownership of a specific unique asset.
NFT Benefits:
In addition to security, NFTs also provide many other benefits including:
- Transparency - as ownership is able to be verified by anyone on the blockchain.
- Portability - allowing quick and easy transfer of ownership.
- Decentralization - because they are not controlled by any centralized authority, owners have full control.
What Can an NFT be used for?
NFTs can be used to digitize physical assets, monetize intellectual property and verify the authenticity of assets on the internet. They live in your crypto wallet and function as a variety of things like:
- Documents and certificates, like degrees, licenses and medical records
- Collectibles - like artwork, sports memorabilia and luxury goods
- Real estate - in both the virtual and physical worlds
- Proof of Attendance - from virtual meetups or concert tickets
What are Web3 Domains?
Traditional domains, as we’re used to in Web2, serve as website addresses that you type into your browser, like twitter.com. These domains were originally built to do much more on the internet, like email and payments; however, they haven’t progressed much beyond displaying websites. This could be because traditional domains have been controlled by centralized servers since the internet was created, making it much more difficult for developers to innovate on top of that technology.
The development of blockchain technology opens up a whole new realm of possibilities on the web, specific for domains. Web3 domains are essentially NFTs that represent your digital identity by a suite of smart contracts, or software written on a public blockchain.
This means that instead of one company controlling your data online, the power is transferred back to you as the user. Web3 domains are built on blockchains and anyone can look at the data stored on the blockchain, creating a level of openness and transparency. On top of that, there is the benefit of enhanced security—because Web3 domains are held in your wallet, you hold the power to make updates to them and control what you share.
All that to say, blockchain superpowers give everyone a safer way to surf the internet while also giving control back to you over what gets shared and where it gets shared.
Benefits Web3 Domains Offer:
In addition to hosting a decentralized website, Web3 domains are versatile and offer owners of them many benefits including simplifying Web3 and complete ownership of their data and online identity.
When participating in Web3, you need a crypto wallet, like Metamask, which stores your cryptocurrency and digital assets and allows you to transact. Wallet addresses are composed of long, complicated alpha-numeric characters, like 0xbc1qw508d6qejxtdg4y5r3zarvary0c5xw7kv8f3t4, which are difficult to remember.
Sending and receiving payment is complicated and prone to error as you need to very carefully enter or copy and paste the wallet address every time. Because Web3 is decentralized, meaning there isn’t a central body of authority in control (like a bank), one small mistake sending to the wrong address could result in the loss of your crypto or digital asset forever. This is why it’s very important that you are extremely careful when transacting. Web3 domains replace these long complicated addresses with human-readable names, like john.crypto or sarah.x, which simplifies the process and reduces the chances of error when sending or receiving cryptocurrencies or digital assets. Web3 domain names powered by Unstoppable Domains can be used to send and receive 300+ coins and tokens across multiple blockchain networks.
Gone are the Web2 days of having hundreds of usernames and passwords for each site that you visit while big tech brands control, own, and profit off of your data. Your Web3 domain also acts as a secure single sign-on and allows you to login to hundreds of decentralized applications. You also have control over the data you share, like your name or email with the websites that you visit. This allows you to own and control your digital identity across the web.
Web3 is about ownership and maintaining control of your personal data, but often you need to share an email to get important updates from your favorite apps, games, and metaverses—making it harder to know who has access to your email or to control what emails you get. With Unstoppable, you can also use your Web3 domain in an anonymized way to communicate with companies, services, and communities via email, all while maintaining the privacy of your personal email address. Alternatively, you can create a new email account using your Web3 domain via Unstoppable Domains’ integrated partners, allowing you to send end-to-end encrypted emails using a domain @ud.me email address.
As you can see, there are many unique features that Web3 domains offer in addition to the traditional domains you’re used to. These features will continue to grow and expand and more and more are created.