Why is blockchain important for NFT?
NFTs have been making it to the news since their boom in 2021. The NFT market grew from $40.96 million in 2018 to $338.04 million in 2020. It was a whopping 8 times increase in just two years. Then in 2021, the NFT market broke all records and went to $41 billion.
It’s fascinating to witness how the NFT grew from scratch to become a major part of a decentralized economy. One thing that remains constant whenever we talk about NFTs is blockchain technology.
Blockchain is the reason we have NFTs and crypto today. It is the foundational technology behind the entire decentralized economy. Had there been no blockchain technology, we would never have had crypto, NFTs, metaverse, NFT games etc.
Blockchain and NFTs are two different concepts but related to one another. NFTs completely depend on blockchain for their existence.
Let us now understand in depth the role of blockchain in the NFT space.
The Link Between Blockchain and NFTs
NFTs are non-fungible tokens or digital tokens that represent unique assets. It is built over a blockchain network and executed as per the smart contracts.
The correlation between blockchain technology and NFTs is a simple one. Blockchain is the foundational or primary technology on which the NFT is built.
Let us understand this with an example. You may have smart devices like Google Assistant or Alexa at home. Even if you don’t have it at home, you must have seen how it works. These smart devices perform certain tasks when you instruct them to.
All smart devices are built using AI and ML technologies. These devices can respond to your command only because it has been laced up with artificial intelligence. So, here, AI is the foundational technology that has made the existence of Alexa-like devices possible.
In the same way, blockchain is responsible for the emergence of NFTs. Blockchain is the technology and the NFT is one of its applications.
So, what does blockchain offers to the NFTs?
How Blockchain Technology Benefits NFTs?
Blockchain gives NFTs some unparalleled features that make them innovative and multi-purpose.
Decentralization
NFTs are built over the blockchain network. Meaning all its data are stored on this distributed ledger. Being a distributed digital ledger, blockchain ensures decentralization.
It means that no government, third party or institution has control over the blockchain and the data stored on it. Instead, all the users exercise control.
So, the NFTs and the data are in no one’s control. But anyone who wishes to check the authenticity of the NFT can access the data. Thus, the whole system is decentralized and transparent.
Data Security
As no single person, institution or group has control over blockchain, The NFTs and their data are secure from an altercation.
Moreover, the system of data storage on the blockchain ensures that no one can hack or alter the data. If anyone tries to hack, he has to hack 90% of the network’s nodes spread all over the world, which is impossible.
Data Immutability
The data storage mechanism in blockchain ensures that no one can alter any data. Even if someone alters data, the system is set to automatically cross-check. It will instantly find the altered data and automatically correct it. Additionally, the system will also mark the altered data as an error or invalid.
So, your NFT and its data are secure on blockchain as no one can hack, alter or do any fraud with it.
Wrapping UP
You mint, sell and buy NFTs over the blockchain network. Once you have created an NFT on the blockchain, its data has been stored on the network for eternity. Other people can always check the authenticity of your NFT by accessing its information on the network but can never change it in any way.
Blockchain technology is the central force that made it possible to tokenize assets through NFTs. Without blockchain, there would have been no NFTs or NFT platforms.
