TL;DR Breakdown
- Non fungibe tokens can create digital assets that are unique and are solely owned by the party with copyrights.
- NFTs make it possible for companies to remove counterfeits and trace assets along the supply chain.
Non-fungible tokens in business
Non-fungible tokens or NFTs can create digital assets that are unique and are solely owned by the party with copyrights. However, they are gaining such fame in Industry 4.0. NFTs are used in art because it is easy to verify their originality, ownership, and artists can earn profit from their work. These factors are also important in business. Digital data is gaining such momentum as technology continues to advance.
Involving NFTs in supply chain
Several reasons companies have found it worth investing in NFTs. In the supply chain, NFTs can be used by a network of individuals involved in availing commodities to consumers. NFTs preserve the originality of the assets as it changes possession utility from an individual to another. This way, NFTs enable companies to take pride in their works.
In the supply chain, NFTs make it easy to track assets from the supplier to the consumer. They make this possible by providing the history of holdings during the exchange. A buyer can easily see the origin, the quality, the manufacturer, and previous owners of the asset. On the other hand, the company can track the asset’s location, whose possession it is under, and can gain royalties each time it changes possession. It is also important to note that NFTs cannot be destroyed and cannot deteriorate in value urges more companies to embrace digital assets.
Non-fungible tokens make it possible for companies to remove counterfeits and trace assets along the supply chain. This is done by authenticating commodities, their quality, and their origin. It ensures that the company’s assets remain unique in the market.
Treading along digitizing assets, companies and retailers are embracing NFTs. A company like Louis Vuitton announced its plans of digitizing expensive, high-end assets to NFTs in 2019. The advantages of doing this lay on both the company and its customers. Customers can proof-check the authenticity of assets, and the company can track the nature of their commodities even after the sale. As the fashion industry works towards sustainability, customers can easily get information about an asset’s production and manufacturing process. Transparency is heightened to a point that the customer can see the manufacturing cost of the assets they are to acquire.
Transformation of mainstream commerce by NFTs
Mainstream commerce involves the most acceptable ways of exchange of commodities. As NFTs raid the finance sector of the global economy, many investors have found the need to digitize their assets to NFTs. Since the beginning of the year, there has been a 1785% growth of NFTs. This is proof enough that the traditional way of commerce does not work well.
A study shows that around $428 billion worth of goods is returned in a year. About 6% of these were return frauds. With NFTs, such crimes can be reduced significantly since non-fungible tokens can easily prove ownership of assets, including second-hand goods. The traditional way of doing commerce depends heavily on a centralized entity to prove ownership.
Moreover, most of this verification is done on the paperwork proven to be bulky and outdated. Paperwork is also easy to fake, unlike non-fungible tokens, which are based on a decentralized ledger. With the rapid growth of the crypto market, there is a promising factor linked to digital NFTs and associated IDs with the help of QR codes and NFC smart labels. Since it is advantageous to both the suppliers and consumers, it is the way to go!
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