DPL 61: What are Smart Contracts in NFTs?
[Practical Example Inside] Use them for MASSIVE GROWTH for business & holders.
Many people ask me why I am so much into NFTs why I am always talking about it...
There are indeed many reasons, but here is the major one:
With NFTs putting blockchain into the spotlight, now is a great time to learn about smart contracts.
The operation of non-fungible tokens is dependent on smart contracts.
They are bits of computer code that enable the user to store data permanently and transparently.
These codes are ultimately in charge of the digital assets known as NFTs.
A smart contract is a key element in blockchain-based ecosystems.
They're particularly significant in application-focused blockchains like Ethereum.
Smart contracts are self-executing bits of computer code that can facilitate, verify, and enforce the execution of an agreement.
They're not only contracts published on a blockchain.
Smart contracts are created in programming languages; one of them is Solidity.
They are unchangeable and lethal, unlike traditional computer programs.
As a result, they can be used for various financial and administrative purposes.
Smart contracts are similar to written or traditional contracts/agreements but in digital form.
Witten contracts come with extensive obligations that require a high management level and may result in future disputes.
Smart contracts have the potential to dramatically change the way we use contracts/agreements for commercial purposes.
They are faster and less costly than traditional contracts since they do not require human authentication by third parties.
Let's take an example:
You wish to sign an agreement of sale/property with a builder to buy a flat.
Traditional/Written agreement: Documentation fees, transaction fees, stamping fees, time is taken for stamping or signing, sale deed, etc.
Smart Contract: With the help of tokenization, the primary benefit is it is less time-consuming.
By adding blockchain into real estate deals, smart contract technology may also remodel the paperwork and transaction workflows.
Smart contracts will handle record-keeping, documentation, insurance, etc., by keeping all the data in the blockchain, i.e. digital form.
But with smart contracts, we can build a similar system that doesn't require a third-party/agent.
With the help of a smart contract, we can program it so that payment by the investors might not go through until the services or a certain goal is reached.
But as we know, NFTs might not work like this.
NFTs use smart contracts; they execute code from smart contracts that follow various standards, such as ERC-721.
This data is stored on the blockchain, where the NFT is controlled.
To give an idea, there are 4 types of token standards until now, i.e. as of February 14th, 2022:
ERC-20 - A standard interface for fungible (interchangeable) tokens, like voting tokens, staking tokens or virtual currencies.
ERC-721 - A standard interface for non-fungible tokens, like a deed for artwork or a song.
ERC-777 - A token standard improving over ERC-20.
ERC-1155 - A token standard that can contain both fungible and non-fungible assets.
Let's list down the top 4 benefits of using or having smart contracts while minting/launching an NFT project:
Transparency
Reliable & Efficient
Secured
Quick process
Now let's understand each point in brief.
1. Transparency:
One of the most important features of a smart contract is the precise recording of all terms of service.
Because of its decentralized structure, blockchain technology makes transactions safer.
Being said, that is not necessary; hacking won't happen; it might happen, but the process (to hack) can be longer.
With the help of a smart contract, all parties involved can get total access to the contract.
If the contract is changed, they can review it.
This ensures that all the parties are informed about the transactions.
2. Reliable & Efficient:
Everything is precise due to the requirement for authenticity while describing the contract.
There must be an opportunity for misunderstanding or misconception.
As a result, smart contracts can significantly reduce the efficiency wasted due to communication gaps.
3. Secured:
At the Blockchain level, Smart Contracts leverage encryption.
Because blockchain transaction records are encoded, they are extremely difficult to hack.
Furthermore, each entry on the ledger is linked to the preceding and following entries; hackers would have to modify the entire chain to alter the transaction.
Each transaction's key facts are recorded in these contracts.
As a result, every time your information is utilized in a contract, it is saved indefinitely for future records.
4. Quick process:
There is no need to manually process papers.
These contracts are based on technology that is accessible over the internet.
Hence transactions are completed faster.
Many typical corporate procedures can be cut in half with this speed. Because intermediaries are avoided, there are significant savings.
Hence it doesn't just save time but also money.
Smart contracts may be utilized without incurring needless expenses since no one needs to check that the contract terms have been completed.
These are just some of the points and samples of the wide range of topics Smart Contracts may use.
The breadth of implementation for this technology is essentially limitless.
In addition, the smart contract may guarantee that the digital assets are unique and non-replicable.
This makes NFTs rare and exceptional, which is why they are valuable.
Not just with NFTs, but smart contracts are also used by corporates, real estate, the health industry, and banks.
Smart contracts are now here and being tested in real-world circumstances, and it won't be long until they're ingrained in our daily lives.
In general, smart contracts are the foundation of any NFT.
The potential for smart contracts to be used in future transactions like house loans and other business-related transactions is really intriguing.
I hope you got an idea about what smart contracts are and how they can benefit businesses in the future.
If you are confused, don't worry!
Even though I am not a deep technical knowledge guy, I know the basic things.
But with those basic things, I as a business man is always throwing EXCELLENT EXECUTIONAL ideas to my solidity developers & my DeFi Gang.
One of the recent PRACTICAL EXAMPLE based on Custom Smart Contract is our VALENTINES SPECIAL DROP called JorrKey by JorrParivar.
What is JorrKey NFT?
This NFT token is verifiable for exclusive 1 FREE Tshirt of JorrParivar Limited Edition Collection which will get delivered in March 2022.
This NFT collection drop is to show our LOVE on 14th Feb 2022 as a VALENTINE'S DAY special token as this would be airdropped to 203 wallets holding JorrParivar as off 14th Feb 2022, 12am IST. All 203 wallets are listed here: https://digitalpratik.com/203
Total JorrKey supply is limited to 203.
Anyone can buy a JorrKey at any time and get all upcoming perks and experiences.
What kinda future/upcoming perks & experiences can be unlocked by JorrKey?
Let's say: If you buy this in secondary market after the Limited Edition Collection is shipped, then you will not get the tshirt; however, in future, every time a new merchandise of JorrParivar will drop, holders of this NFT will be able to claim HUGE DISCOUNTS by verifying their wallet during the launch time.
Example: If someone holds this JorrKey in their wallet for the next 10 years & if we launch more JorrParivar Tshirts in 2022 or JorrParivar caps in 2022 or JorrParivar Bookmarks in 2022 or let's say JorrParivar's Television in 2025 as a physical product, then holders of this would be able to get EXCLUSIVE HUGE DISCOUNTS as long as they would be holding this JorrKey in their wallet.
Here's the official JorrKey NFT collection link: https://opensea.io/collection/jorrkey
So based on this recent practical execution around CUSTOM SMART CONTRACT, let me tell you this: It's not necessary you know everything happening in the world; all I want to ensure is you are aware of the things which might affect us in 2032 with the actions you will take in 2022...
With that being said...we come to an end to today's letter...
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https://digitalpratik.com/jorranthem
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that's a value bomb
Smart Contracts explained in a smart way 👌