Thread by @panosmek

#NFTs (XLS-20) on XRP Ledger are upon us. A very important feature that will change the #XRPL forever and bring massive utility, activity and users in the network.
But there are still many people who don't really understand what NFTs are and how they work.
Time for a 🧵1/12

Non-fungible tokens (NFTs) are a type of cryptocurrency that represent a unique asset, such as a piece of art, a collectible, your ID or your real estate property. They can actually represent anything digital or physical. But why would you do that? What are the benefits?

One of the key advantages of NFTs is that they can be easily authenticated and verified due to their blockchain-based nature. This makes them ideal for use cases where provenance and authenticity are important. In the world of DeFi,

NFTs currently are mainly used for digital art and gaming items. NFTs are also immutable, stored on a blockchain and thus they are highly secure. Furthermore, in cases like real estate where current procedures with the transfer of property ownership are extremely labor-intensive

and expensive, NFTs could change this and make the whole procedure more efficient, faster and cheaper.
NFTs offer tokenization opportunities that improve and democratize buying, selling and ownership of assets, and open a new world of possibilities.

The past two years have witnessed a tremendous amount of hype around NFTs, but there's also a lot of misunderstanding. Many people believe that NFTs are limited to images and art or, worse, that they are the images themselves. NFTs simply represent the asset, whatever that is,

and verify who the real owner is. In simple terms, NFTs are digital certificates of authenticity and ownership.
But with NFTs, It has never been easier for an artist to share their work, sell it without relying on intermediaries that take a big cut, and grow their fan base.

Most NFTs have a standard set of metadata attached that is used to show the name, description, and image of a digital asset. As part of the process of minting, the metadata and files related to it are put on the InterPlanetary File System (IPFS).

IPFS provides a transparent, secure, decentralized, and public way to host metadata about assets. Most of the time, the metadata on NFTs is frozen so that your NFTs can be shown off for years to come. This means that the NFT's properties will be permanently locked and stored

using the decentralized file storage system. They will not be able to be changed or removed.

An NFT could be used to tokenize any service or product that depends on an intermediary. Important documents like legal contracts, house deeds, insurance, and licenses can be transformed

by NFTs. Property rights helped economies grow in the past, and NFTs will do the same for the digital economy.

Over the next several years, there will most certainly be a major growth in NFT usage. Tokenization of traditional assets, such as equities, seems to be a definite step

in the future, since it would make transferring them significantly more efficient. NFTs will play an important role in tokenization, a bridge between the traditional world with the crypto world while opening up new possibilities for everyone involved.

#NFTs #XLS20 #XRPL $XRP