What are NFTs 2.0? What is the difference between them?

The market ofNon-fungible tokens or NFTs It has long been criticized for its bubble nature, and while that’s a sad reality, the root cause can be traced to a number of factors. In particular, there is a widespread misconception that technology is geared more for profit than utility, coupled with the relentless desire of early adopters to get rich quick.

For example, most early adopters believe that NFTs have few or limited use cases beyond tokenizing (i.e., minting) JPEGs and auctioning them off for outrageous amounts, or let’s just say that’s what most are led to believe. . In fact, that seems to be the case with the first iteration of NFT technology, although this is about to change completely with the advent of NFTs 2.0.

Essentially, NFT 2.0 is an enhanced iteration or evolution of NFT technology, and as such introduces new updates while adding more utility to the existing NFT Marketplace infrastructure.

However, before delving into the world of NFT 2.0, it’s equally important to familiarize yourself with the initial iteration of NFT 1.0, especially if you’re completely new to the world of NFTs. With that being said, what are the properties of NFTs 1.0?

Understanding the origin of NFTs technology

NFTs 1.0, which are the origin of NFT technology, refer to cryptographic assets stored on a blockchain using unique identifying metadata that distinguishes them from each other.

In other words, the first iteration of NFTs is more about tokenizing digital assets such that they become unique and storable on a blockchain network, where they become immutable, verifiable, and cryptographically secure.

In essence, NFTs paved the way for digital asset ownership while enabling what we now understand as the creator economy. This further supports the common generalization that the genesis iteration of NFTs is more focused on trading tokenized items, therefore justifying the misconception among early adopters who are perceived as more profit-oriented.

However, the current hype associated with most NFT projects, as well as the general misconception, have paved the way for the new iteration of NFTs 2.0, which is more utility oriented on the other hand. With that said, let’s find out what’s so special about the new iteration of NFTs and what it means for the creator economy in general.

Understanding NFTs 2.0

For starters, NFTs 2.0 are not entirely different from NFTs 1.0. In fact, the latter cannot function independently of the former, and to be more precise, NFT 2.0 simply adds new capabilities to the existing NFT infrastructure.

Putting the above in context, while NFTs 1.0 allow for the ownership and trading of tokenized digital items, NFTs 2.0 expand the possibilities by creating new markets for digital assets with advanced utilities (i.e. use cases).

In particular, the latest iteration of NFTs allows NFT holders to do more with their tokenized assets, which can be anything from unique digital artwork to in-game items, coupons/tickets, music, essays, and more. other digital collectibles.

So what’s different about this iteration? You will ask yourself. Essentially, NFTs have four main properties, such as “generativity”, “composability”, “interactivity”, and “experimentalism”, which distinguish them from their predecessor. Since each of them serves unique purposes, we are going to delve into these attributes;

composability/update

This particular attribute makes it possible for collectors to be creative and explore new possibilities by grouping different assets together as one. Of course, these secondary assets are not limited to other non-fungible tokens, but can also be fungible assets such as cryptocurrencies.

In other words, NFT holders can extend the utility of their existing NFTs by adding additional digital assets. In this way, unlike its original state, the NFTs item will be able to serve multiple purposes, thus creating a tailor-made NFTs package.

Let’s put this in a more related context using an artist as a case study. As an artist, your NFTs artwork can function as more than just a piece of art. It can serve as a means to distribute social tokens, for example. For example, in addition to selling this piece of art for its monetary value, the people who own these assets can also access other exclusive benefits.

A prominent example of a platform improving NFTs using composability isKnownOrigin, which is a platform where NFT holders can add new utilities to their existing digital assets.

Interactivity/Dynamism

With composability attributes, the latest iteration of NFTs allows tokenized digital items to evolve from their original state. However, “liveness”, which can be otherwise described as interactivity, makes it possible for existing NFTs to self-execute modifications made to them and other associated NFTs.

Essentially, by equipping each NFT with smart contracts, they literally become “smart” and “smart” such that they can receive input from users and other eligible sources. The introduction of smart contracts into the infrastructure of existing NFTs also makes it possible to interconnect and modify existing NFTs in the first place.

Furthermore, based on input from external sources, the latest iteration of NFT Mafketplace Development allows users to modify their tokenized items from their current state to suit current needs or purposes, especially when used in different categories of decentralized applications, such as GameFi projects, the Metaverse, intellectual property patents, ticketing and many more.

generativity

Another important property of NFTs is their ability to create algorithmic randomness in tokenized digital assets. To understand how generativity works in NFTs, we are going to present a scenario.

Let’s say you have three devices: an iPod that only supports text and music, an iPad that supports video, and a photo album that only supports photos.

Remember that NFTs allow you to combine numerous assets (in this case, content) into a single entity. As such, NFTs use AI-powered algorithmic randomness to choose what is appropriate for each device when sent to or retrieved from that device.

Therefore, if you access an NFT with an iPod, for example, only the audio will be played, while other devices will play the video, music and images, respectively.