by Nick Donarski, founder and the key technical expert of ORE System
How hot were Non-Fungible Tokens (NFTs) in 2021? One indicator might be that Collins Dictionary declared “NFT” the word of the year for 2021. However, the fact that NFTs are now featured in the dictionary hints at a key problem with the trending technology; many people still do not understand what an NFT is or how it works.
A recent survey showed that only 20 percent of Americans are familiar with NFTs. Another 14 percent had heard of them, but did not know exactly what they were. For a technology that is being viewed by some as the future of ownership with applications in virtually every industry, clearly there is work to be done to bring an understanding and appreciation into the mainstream.
What are NFTs
For those among the 80 percent who are not familiar with NFTs and the blockchain technology that supports them, let me define them quickly. Blockchain is simply a type of computer network that is used to distribute information between a chain of systems. The security and integrity of data on a blockchain is maintained based on a timestamp and a calculated value known as hashing. Blockchain technology allows for data to exist autonomously and be available to anyone on the network. NFTs are simply a package of data placed on the blockchain. While NFTs historically were used only for art or viewing purposes, the future of NFTs promises their use for much more.
Why NFTs start with gaming
One area where NFTs are already taking hold is online gaming. Those familiar with the gaming world will know that it is not unusual for new technology to be tested by the gaming community before finding acceptance in other markets. Those familiar with the gaming world will also know that acquiring tradable assets that fluctuate in value based on market demand, something that sounds a lot like NFTs, is something that is central to many of the most popular games.
For those who want to play a role in taking NFTs mainstream, the gaming world provides an unparalleled opportunity. Recent estimates place the number of people involved in online gaming at between 2.5 billion and 3.2 billion. At the high end, that is nearly half the world’s population. In addition, many games have already laid the groundwork for introducing NFTs as assets that can be purchased or achieved during gameplay.
How any business can benefit from NFTs
The ORE System takes everything great about gaming and puts it on a blockchain platform. While our next-gen system creates a world of new opportunities for gamers and game developers, one of the most promising innovations that it brings to gaming is found in the royalty protections it extends to content creators working with NFTs.
Smart contracts, which are part of the data attached to NFTs in the blockchain, capture and secure the details of NFT transactions. Because smart contracts travel with NFTs, they allow for a system of royalty protection to be applied to NFTs that greatly increase the control that creators have over their digital content.
Before the blockchain, musicians or other content creators producing for the gaming industry typically were paid only when the first purchase was made. Smart contracts allow creators to stipulate that they will receive royalty fees every time their content is sold for the life of the NFT.
Through next-gen NFT marketplaces like ORE Forge, content creators including musicians, artists, sound engineers, 3D modelers, and others can create and distribute assets for use by developers and gamers in a way that allows for full control of licensing. For businesses looking to bring their brand into the world of online gaming, blockchain platforms like ORE System do away with the learning curve. They provide access to expert support professionals, developers, managers, and creators that can open the door to developing NFTs that provide revenue and residual income from royalties, as well as greater brand exposure.
The opportunities for utilizing NFTs are endless. From real estate to healthcare to rights management, NFTs have the potential to solve real world problems and help many businesses to become next-gen businesses. Those who want to play a role in the growth of NFTs should keep an eye on the world of gaming, where the NFT revolution is already well underway.
Nick Donarski is the technical expert behind ORE Sys, LLC, and the inventor of the multi-part ecosystem that is the ORE System comprised of the ORE Token, the ORE Forge, and the ORE SDK. Nick is a cyber security expert and has been a featured speaker at multiple cybersecurity conferences and worked for some of the biggest names in the industry.