NFTs in Trade and Finance
From genuine pieces of art to offering proof of ownership for nearly any physical asset possible, non-fungible tokens (NFTs) are quickly rising from being a niche mostly appreciated by crypto enthusiasts to eventually finding a vital role in the global economy.
NFTs have existed for quite some time now, but only in 2021, the previous year, did they see a massive rise in popularity. Their rise in popularity was made even more apparent by the high-profile sales of digital artwork that made headlines. Although this marks an exciting starting step for the sector, it is still missing the wider-ranging potential of the technology in the long term, particularly when trade finance is concerned.
Practical Use Cases
The utilization of distributed ledger technologies (DLTs) or blockchain technology implies that acquiring finance capital does not need to include big central institutions or middlemen in any way. Intermediaries are currently required in some form to create more trust between parties in transactions, trade contracts, and investments. Rather, here, trust can be formed by and constructed into the very structure of the network itself, with transactions occurring via tokenized contracts, which allows payments to be instantaneous, low-cost, and aided by smart contract escrow.
Non-fungible tokens, which are connected to a distributed ledger at an intrinsic level, offer secure, reliable, and accurate digital…
