I see a lot of people running around bumping gums on NFTs as if they discovered something new. In reality, NFT is the first generation of blockchain use case and Bitcoin by design uses the concept of NFT. What we want to help you understand in this Part 2 series is to look at NFTs from a boss level and not get caught up in clickbait articles and headline hype about NFT.

A non-fungible token or NFT is a digital token that cannot be transformed and maintains itself as a unique identity. If you look at blockchain distributed ledger and the hashing technique, each ledger entry is forward-hashed so it cannot be manipulated through someone trying to change a value later on. This hashing technique is the fundamental explanation of blockchain technology.

Let’s give an example to fully understand. If the first row is ABC and we compute a hash to 123 and the second row is DEF, we compute a hash of ABC + DEF to create a new hash of 456. Now if someone comes back and tries to change ABC to XXX, it will not hash to 123, and ABC + DEF will not hash to 456. So blockchain maintains the integrity of the data by making sure the forward hash can be reproduced and repeated.

The basic folks can stop acting like NFT is something new – NFT is just some hipster spin on how core blockchain technology works. Now, do you see where the NFT actually is in the original blockchain distributed ledger? It is the ABC and DEF that would be considered the NFT and the hash value is the verification.  

The actual term is not NFT – it is called a digital asset. If you look at it as a digital asset, then you start becoming more of a boss than a bandwagon chaser and begin to understand the opportunities. There are several original use cases for digital assets that you are now calling NFT.

Land Deeds. In Africa and Latin America, people wanted to have deeds and titles on the blockchain to prove they are the landowners and transferred the deed in that fashion because they could not trust the government officials.  

Luxury Products. The wine industry was one of the first to have unique QR codes on the label that you can verify on a blockchain for wine authenticity. Then luxury goods such as handbags began using a serial number on a blockchain that allows someone to see the transfer history and verify if the bag is real and who was the last actual owner to ensure a valid transfer – I want you to get this one in your head because this is your boss level move.

Digital ID. Multiple refugee programs trying to assist those fleeing war-torn countries to Europe needed IDs and documents – listen to this one because this is how NFTs really came about. They used the blockchain to record in a blockchain distributed ledger the photo of the person, the biometrics of a person, and other information. This information can be retrieved anywhere using a shared distributed blockchain ledger.

Stock Shares. Overture created a security token on a blockchain and kinda pioneered this concept for real-world use for selling shares. Company stock is listed on the blockchain and transferred to shareholders. The shareholders have actually a lot of leverage being on the blockchain in this manner. They can vote and receive distributions by having that unique token as their proof of stakeholder ownership.

If you think about how these digital asset models work, you should see there is a need for two blockchains, not one but two. The first blockchain registers the digital assets in a forward hashing manner. The second blockchain record the transfer or activity of the digital asset in a forward hashing manner. Just like in accounting you have an asset ledger that records your equipment and you have a log entry on the activity or transfer of that equipment as well as record the depreciation for tax reporting.

Dream and Hustle Early Adopters – the 20 folks who truly supported this blog will have access to Toshikiso Digital Asset Blockchain technology. They can create a digital asset and store it in a blockchain vault and they can record the transfer of that digital asset on another blockchain. So they will have immediate access to start looking at creating NFT or digital asset solutions while the rest of yall will be clicking on clickbait links and adding comments in a comment section somewhere.

Now let’s look at how you can go into the NFT or digital asset opportunity like a boss. Don’t just look at buying and selling digital assets or NFT artwork, look at creating the infrastructure and rails to accommodate the paradigm shift.

Establish a Blockchain of Record. You can create the registration of assets and facilitate the transfer of that asset – that is exactly what NFTs do. The art-based NFT registers artwork then people auction for the NFT art and the winner is recorded as the transferee of the digital asset. Instead of hippie artwork, think of things like getting government contracts offering registries, titles, and licenses. Think of getting a contract with luxury handbag makers and creating serial numbers to track their customers and if they transfer to a new customer, that becomes a new customer to the business – you may want to read that again, you basically turning used buyers into a new customer for that business through the blockchain.

Establish the Drop Culture. The biggest opportunity is not the NFT itself but the shift of Hype Beast drop culture to virtual drops due to the pandemic. For NFTs or digital assets, there needs to be a culture to be notified of the drops and this is done through social media, blogging, and other curated lists and promos. You can do drop cultures physically by just hosting flat screens on movable stands or easel and inviting people to come to view the screens – charge people access. You can take over laundromats and hair salons and have a wine sip and NFT event. You can host drops at sneaker shops, almost anywhere and promote a subculture to run NFT auction events and run promotions locally or worldwide through digital channels.

Offer APIs and Web Services. You can offer services such as adding a digital watermarking to an image that can only be viewed properly with an unlock token or serial code. You can offer a rental service where an art museum can rent a digital asset of the blockchain and you facilitate payment and transfer. You can offer services that can verify if someone is the authorized owner of a digital asset. You can run the auction service or exchange marketplace as an API on behalf of other NFT drop platforms. You can also facilitate the issuance of corporate shares and handle corporate affairs just like our upcoming Stony|Ellis service. These are self-service APIs to allow acquired NFTs to be leveraged to generate revenue for their new owners.

One more thing before we go that many people forgot about that is the most lucrative use of digital assets is the “token” in NFT. You don’t make money off one unique non-fungible token; you make money off millions of unique tokens you offer as a solution. Those tokens can be a one-time license to play a South African house song on a streaming service as a royalty payment. A music service buys 5000 license tokens at .07/token that is non-refundable just like they are non-fungible, lol. The music artist gets their cut, you get your cut as soon as that order is placed. That token unlocks off the blockchain the binary file of that song to play – I’m just giving you an example where not only songs but podcasts, video, and other licensing deals you can do – not just one hipster NFT art. That’s where the real money at.

This article was designed to help you understand that we are in a new paradigm shift of digital ecosystems and digital assets and you want to approach these opportunities as a boss and make those first early-stage moves. Don’t be a customer or a fad-chaser like these other folks, there is plenty of open sky opportunity for you to get in and get yours, right now.