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It is understandable that people still do not fully understand what NFTs are. As many people doubt NFTs and how it works, most people will just brush it away as a fad. I am not here to push an agenda saying NFTs are all good or all bad. Different people leverage NFTs to their financial advantage. You do not need to be one of them, but there are people who do so.
If you do not know what NFTs are, it’s an acronym for Nin-Fungible Tokens. Here is Investopedia’s definition of NFTs:
Non-fungible tokens (NFTs) are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions.
Why are NFTs important in our present day?
It is no secret that ownership of digital ownership has been a thing for a long time around. Ever since the dawn of internet, people own websites, digital works, digital arts, and whatnot. NFTs are no different to that and can help you earn money in the long term.
The reason why NFT is a hot entity now is because it is on the verge of revolutionizing trade finance and global commerce. When you purchase something online, there has to be a finance organization (or several) that connects and tokenizes merchants and its buyers. Most times these finance organizations tend to be a centralized finance institution (like banks).
NFTs are a new class of financial assets of its own. It can be considered as a significant overhaul to almost every payment system, financial services, and supply chain around the world.
The reason why NFTs are important is because it represents digital ownerships. They are built and constructed on smart contracts and blockchain technologies. It is the very same decentralized network that powers many popular cryptocurrencies you see today.
Blockchains are platforms where they are trustless, secure, and provides completely verifiable data. As NFTs leverages this, it can take any kind of information like an image, a 3D model, documents, etc. It represents a more useful form of digital information. The data coded into an NFT cannot be changed, counterfeited, or accessed by anymore. If someone steals the NFT, its history and destination will still be completely be visible to everyone.
What it means for you
It does not matter if you own an NFT as an individual or a business owner. Regardless of where you are coming from, NFTs open up a whole new world of possibilities for handling sensitive and private data. It provides a mechanism for creating cool new products. Each transactions made will be recorded immutably with a minimum of human intervention.
If you are to go through trade finance institutions, you may find that you face complicated regulatory and supply chain procedures. It involves multiple shifts in parts and needs a great deal of trusts. It is one of the few sectors that are highly susceptible to document fraud,
By acquiring or producing NFTs, it can remove all these barriers you face with a financial institution. It helps eliminate fraud and reduce your reliance on a middleman by tokenizing assets and documents into a single immutable digital token.
It’s not to say financial institutions are bad. There are times when you still need to maintain your assets with financial institutions. There will be times when financial institutions can do what NFTs are not able to do, and vice versa.
How do you incorporate NFTs into your wills then?
We have touched on this area on a couple of occasions before. The steps to take are pretty straightforward and not as complicated as you think it to be.
If you have any NFTs, cryptocurrencies, or online assets, you can list them down in your wills. These include your social media accounts too. If you include your cryptocurrencies and NFTs, make sure that you include a step-by-step guide to how to access your accounts. Also good to include in the step-by-step guide is how to cash out the NFTs and cryptocurrencies you have. You may list down what NFTs you own too.
If it is social media platform, it works a little bit different. You may choose to memorialize your social media accounts and keep it for your family and friends to remember by. Or you may choose to have it closed if you do not wish to keep it around anymore.
If you do own NFTs, feel free to include them in your wills. If you are unsure of how to list them in your wills, feel free to reach out to a lawyer for help. If you need any assistance, talk to us so we may help you with your legal needs.