Non-Fungible Tokens debuted on the emerging tech scene in 2017, but only gained global attention in 2021 when Beeple’s artwork sold for $69 million.
So far, NFTs have largely transformed the digital art industry, enabling creators to protect their copyright and intellectual property rights. But the technology is still in its infancy, so much is still not understood about its true full potential.
One thing is certain, though: NFTs are changing the ownership and reliability of products as we know them today. For companies looking to protect their products at each stage of the supply chain, NFTs are key to an efficient and bulletproof end-to-end product authentication strategy.
Learn how NFTs affect product authentication and ownership in this guide. https://authena.io/security-seals/ To learn more about new use cases for NFTs.
What are NFTs?
NFT stands for Non-Fungible Token. Essentially, NFTs are strings of letters and numbers, or codes that act as digital representations of physical assets. The original purpose of NFTs was to allow the exchange of two or more items with unique, non-exchangeable values.
When these digital or physical assets with NFTs attached are exchanged, bought, or sold, each transaction is recorded and stored on the Ethereum blockchain. Moreover, these records are easily traceable, immutable, and impossible to tamper with.
Today, NFTs are primarily used to represent ownership of assets and enable certain crypto transactions. However, we see new use cases every day in industries such as product authentication, membership only, and digital identity verification.
Features that make NFTs unique
To fully understand the potential of NFTs for product ownership and authentication, it is essential to see the characteristics that make NFTs unique. These include:
- Unrivaled transparency and traceability of transactions recorded on the blockchain
- Standardization of protocol to make NFTs interchangeable across several different platforms
- NFTs can be traded openly on the free market
- NFTs are liquid assets and can be quickly sold for cash.
- NFT transactions are immutable and impossible to tamper with (sauce)
Understanding the Product Ownership NFT Case
NFTs can be bought and sold on a free marketplace, but owning an NFT is not quite the same as owning the associated underlying asset. For example, purchasing an NFT linked to a work of art does not give the NFT purchaser automatic rights to the work of art itself.
When purchasing an NFT, the purchaser should conduct the necessary due diligence to understand the terms of the purchase agreement. Say MakeUseOfSeller may transfer ownership of physical assets or intellectual property rights, but this should not be taken for granted.
of smart contract An NFT-encoded contract will be a binding contract that determines the rights a new owner acquires when purchasing the NFT. The best technology for authenticating tangible products and binding digital NFTs with ownership is Authena M3TATM, a solution that authenticates the bridge between the metaverse and the physical world.
Using NFTs for product authentication: NFT Authenticity Seal
Using NFTs for product ownership comes with nuances that may not be so simple to understand from a legal perspective, but the benefits of using NFTs for product authentication are much simpler.
NFTs are used to create digital twins of products and are embedded in smart labels. As products move through the supply chain and are scanned through smart label-enabled devices, a trail of transactions is created on the blockchain.
This immutable, authentic information is accessible to both manufacturers and end users to verify authenticity claims made by the brands themselves.
These authenticity labels help brands protect themselves against the threat of counterfeiting and fraud, and help consumers make informed purchasing choices.
You can learn more about the benefits of using NFTs as part of your product authentication strategy by visiting the following link: https://authena.io/security-seals/.
Advantages of using NFTs for product authentication
Essentially, NFTs are immutable certificates used to verify product authenticity and ownership. But what makes these lines of code truly revolutionary is the fact that their work is based on and benefits from blockchain-based technology.
Benefits of using NFTs as a product authorization tool include:
- Blockchain environment is created to prevent data loss
- Blockchain system is decentralized
- Thanks to peer-to-peer security protocols, transactions cannot be easily modified without the consent of blockchain users.
- Blockchain transactions are instantly traceable and accessible
Partner with product authentication experts to implement the NFT Authenticity Seal
Implementing NFT technology into a product authentication system is fairly straightforward, especially if you partner with experts who can better understand the needs of your company and its supply chain. In addition, product certification professionals help avoid the pitfalls of implementing a new system by providing an end-to-end turnkey system that requires minimal training.
Last update: September 6, 2022