Last year, venture capitalists poured more than $4.6 billion into infrastructure and related projects non-fungible tokens (NFTs). This infrastructure now requires users. They will come when people realize they can application of these NFTs not only for speculative purposes but for planning and organizing daily activities. For this, they don’t need NFT – they need to sort out their lives. And, the decentralized catalog is there to help them do that.
We can think of NFT as a ledger that people own, and this ownership is recorded in the blockchain. But what it really lacks is a library.
Not just flowers, but gardens
Multiple NFTs create a collection forming a system. This system is structured through the standards used. If you have ever visited CryptoKitties, you may have noticed the museum-like categorization of Kitties and their attributes in the “catalogue”.
However, each item in the collection is meaningless without the collection itself. You cannot take CryptoKitty out of the original smart contract. You can copy the image or create a fragmented version, but you will not be able to transfer the value if the derivative version of your CryptoKitty is not linked to the original collection. This means that the value of each NFT is not determined by the individual items in the collection but by the collection itself.
In simple words, if we step back from every item in almost any collection of NFTs, we will find that the real value is not in one NFT itself but in a perfect system of various NFTs tied together with one smart contract. By doing this, we stop looking at a single flower and realize that we are in a well-designed garden.
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By applying all the standardization approaches and organizing all the data correctly, we create a systematic list of items that are publicly stored in the blockchain – a decentralized catalog.
How decentralized cataloging can add new value
Everyone has heard of the Guinness World Records, the Michelin Guide or the IUCN Red List. In short, the whole catalog is very expensive. Behind each is a managing authority who invests the brand and its expertise to bring value to each iteration of the new catalog. Although the rules for adding new items to the centralized list are not transparent or even questioned, this approach persists.
However, the biggest problem that this catalog presents is the very high barrier to entry for new listings that are important to enter the market. But through NFT’s infrastructure and Web3 mindset, we can democratize the process of building an important catalog. The difference between a normal list and a decentralized catalog is the potential value it can collect.
If you have a CryptoPunk, you are the owner of the CryptoPunks collection. Yes, CryptoPunk can represent your inner self, but on its own, it’s just a JPEG. As we have seen, the value is in the collection, and that value is created not only by the expertise of the character generator designers but also by the owners of the collection.
By building an economy powered by shared ownership, we can create a transparent and future-proof catalog system. While the list of other restaurants will hardly add anything new to the community, there are many situations that create a decentralized catalog.
Let’s imagine the most basic use case of decentralized cataloging. You have a book collection and you want to share this book with others. But you know, there’s a good chance that the person you lend your book to won’t be able to get it back. That’s life.
So, you start the very simple process of creating a record of every book you use into a decentralized catalog; only each record is actually NFT.
The person who took the book decided to use it to put their own book in the catalog and share it with others, and that person also shared it with friends. In a few years, your book sharing club will become an internet phenomenon, with more and more people adding books to their catalog.
It was only a matter of time before the big publishers got involved too. Some publishers may start adding newly published books for distribution through the catalog system they create. As we know about NFT compatibility, it is clear that all the NFT markets and infrastructure we have today will be practical tools and interfaces that will work together. No need for additional listing websites, centralized bookstores or payment solutions.
And it all starts with you, who adds the first book as an NFT to your shared book collection.
The same approach is used in Cointelegraph Historical NFT Collection. This is a news catalog from the biggest crypto media outlets, and Cointelegraph readers vote for the news to add.
The future of standard NFTs is ordinary, and that’s a good thing. We use many common everyday items that are overpriced when they enter the market. As production and technology developed, however, prices fell and became available to everyone.
The same thing will happen with NFT. The only thing left to do now is stop look at the tulips and start planning the garden.
Ivan Sokolov is the founder of Mintmade, a project focused on building a new asset class that will power the next generation of Web3 businesses.
This article is for general information purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.