Crypto space never runs out of offering something new. Every day there will be something new that you hear around blockchain tech. Now the latest hype is all about NFTs and that it is selling for millions of dollars. As weird and strange as it sounds, they bring the most advanced technologies along with some fun and excitement for the investors and ‘crypto freaks’ to yield more profits and exclusivity. The attention-grabbing ability of these tokens is because they are nothing like the fungible tokens that exist in the blockchain to date.
They open the new doors of gaining entire ownership over a digital asset. Be it a sword or a shield, when you own an NFT of a specific asset, there’s no more exchanging business there. This is what moved the hype faster around the world. You can take CryptoKitties as the perfect example of how capable these NFTs are. Like adding fuel to the fire, the craze for NFTs touched the peak when they got embraced by celebrities, bands, and artists for having complete ownership over their assets.
What is NFT?
NFT, also known as Non-Fungible Tokens, is nothing like the other tokens of the blockchain technology as these tokens are non-exchangeable or tradeable. To make it more relatable, let’s consider that we want to exchange one Bitcoin with another. The trading gets finished off quickly, as all the Bitcoins are equal in their value. The same goes for Ethereum, TRON, or any other tokens, for that matter. But that’s not the case in NFTs.
NFTs are a form of cryptocurrency that is way different from each other. They have unique metadata that exists on a blockchain, and they cannot be exchanged or replicated. Think of it in a way that you cannot exchange Mona Lisa art with that of a child’s drawing. They are unique and cannot be swapped. Ownership- is what speaks here. One can own an NFT and gain exclusive rights to the asset. The asset can be anything ranging from music art and videos.
The three factors like transferability, ownership and authenticity are what makes these NFTs speak volumes in the art and gaming industry. Most recently, apart from these two industries, NFTs has seen relatively more extensive use in the supply chain market and they are looking forward to launch NFT for the supply chain market.
Supply chain market and its shortcomings
The pandemic situation that had been affecting a vast number of sectors with leaving so many uncertainties for many businesses in the future. Apart from many other industries, the long-standing problems in the supply chain market have grown multi-folds. Issues like traceability, accountability, and outdated analogue supply chain management have all led to further friction and inflexibility.
Moreover, the database management introduced new threats when they increased the exposure to the networks, including the internet.
When no other digital technologies were able to fix all the problems, blockchain-based solutions like NFTs came into play. Let’s look at how NFT has helped in supply chain management now.
Got an Idea to Try out NFT for Supply Chain Market? Let’s Discuss!
The use of NFTs and blockchain in the supply chain of products means that they can all be individually authenticated. And they can be used to identify and trace the complete supply chain. This has also been adopted by the high-end fashion brand- Louis Vitton.
The three significant benefits of using NFTs in the supply chain is that they offer:
Let’s look at each of the benefits in detail. The issues and how blockchain-based solution NFTs can offer solutions to it.
Issues: In order to reach the end-user, the goods are set on a journey across countries by being passed hand to hand. For a company to improve their service, it is necessary to know about the product’s journey. It’s crucial for a company to document the supply chain in real-time. But without a uniform traceability system, there are high chances that the efficiency may decrease, and the lack of accountability will occur.
Solution: But with blockchain and NFTs, there is no repetition of the above-mentioned disputes, as the records are decentralized, transparent and any parties along the supply chain can view it. There will be no system malfunction or no worries over losing the physical documents.
Issues: As the goods are all traceable, there might arise some situations where the companies need to recall them. For instance, in the food and pharmaceutical industries, there should be no violations in following the customer protection law. Sometimes there might arise a need to remove affected goods. But this may become difficult when there is no definite structure for observing and documenting. It might cause a lot of troubles to the company every day.
Solution: With the introduction of NFTs, the companies can track the issues efficiently, locate the affected goods quickly because of the transparency and recall them when necessary. The supply chain data can be used as the reference point for finding faulty products and preventing at present and to take future measures.
Issues: Fake goods constitute a fair amount of the world trade, as counterfeiting is becoming one of the biggest plagues in the global supply chains. If the journey of the goods is not supervised well, the issue may occur at any point of the journey. Be it the replacement of raw materials, use of cheaper parts etc.
Solution: A blockchain with smart-contract can be used for identifying the individual goods, and they assure that the actual products cannot be replaced with fake ones. Whenever there is a product transfer, it can be recorded, and it increases the efficiency and trust of the customers as well.
On the whole, the NFTs play a nuanced role in redefining the supply chain market by their unique characteristics.
As blockchain technology is growing every day, NFTs can be seen in various other sectors as well. Therefore, ensure to get in touch with NFT development services. As the NFTs have an indisputable upper hand over every other token, there’s no doubt that it will be super-beneficial in any sector.
Get the NFT development services for Supply chain management
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