NFTs: An Overhyped Gimmick or a Promising Technology

of the 21st Century

Savelii Lukash

, Nonna N. Shapovalova

1 a

and Andrii M. Striuk

1,2 b

Department of Simulation and Software Engineering, Kryvyi Rih National University,

11 Vitalii Matusevych Str., Kryvyi Rih, 50027, Ukraine

Academy of Cognitive and Natural Sciences, 54 Gagarin Ave., Kryvyi Rih, 50086, Ukraine

Keywords:

NFT, Non-Fungible Token, Blockchain, Cryptocurrency, Crypto, Web3, Decentralized Application, DApp,

Decentralized Finance, DeFi.

Abstract:

Non-fungible tokens are the rising technology of the 21st century that is generally overlooked and considered

to be impractical. This paper aims to analyze the current state of NFT technology, as well as provide reasonable

applications for modern problems and ideas for further development and adoption of this technology. Several

live and in-development examples of such projects were provided in this article together with their description

and reasoning for the advantages of decentralized approach. Readers of this article are encouraged to consider

NFTs as a viable tool for traditional as well as yet unsolved problems.

1 INTRODUCTION

The rise of blockchain and cryptocurrency can be con-

sidered the greatest innovation of how people handle

money since the introduction of centralized banking

(Soloviev and Belinskiy, 2018). Being a decentral-

ized, distributed ledger that securely holds the infor-

mation on digital transactions it has already started to

disrupt traditional business models and ﬁnancial sys-

tems, providing an alternative to traditional banking.

Since the ﬁrst release of Bitcoin in 2009 the industry

has gone long way and has attracted a huge number of

new users, developers and investors. In the world of

ever-growing monopolies, the decentralized ﬁnance is

a breath of fresh air and a world of inﬁnite possibili-

ties.

The number of crypto holders increases year by

year and new successful startups launch regularly. It

is estimated that over 6.5 million people, 15.72% of

Ukraine’s total population, currently own cryptocur-

rency as of 2021 (table 1) (TripleA, 2023). This num-

ber has, undoubtedly, drastically increased in 2022

due to the ongoing events, which have complicated

the traditional ways of managing ﬁnances, for in-

stance, the ban of P2P transfers from hryvnia payment

cards to foreign cards that was passed on 29 Septem-

https://orcid.org/0000-0001-9146-1205

https://orcid.org/0000-0001-9240-1976

Table 1: Crypto owners by country (sorted by the percent-

age of population).

Country

Number

of crypto owners

Percentage

of the population

Vietnam 20,210,834 20.27%

Ukraine 6,516,114 15.72%

United States 46,020,521 13.74%

South Africa 7,712,116 12.45%

Kenya 6,101,599 11.60%

Pakistan 26,457,317 11.50%

Nigeria 22,332,791 10.34%

ber 2022 and took effect from 5 October 2022 (Na-

tional Bank of Ukraine, 2022).

Blockchain, however, can be used not only in or-

der to send international payments with record low

commissions and speed, but also to mint and trade

non-fungible tokens (NFTs).

2 THE NATURE OF NFTs

A non-fungible token (NFT) is a record on blockchain

which is associated with a particular digital or phys-

ical asset. Unlike regular fungible tokens (such as

Bitcoin, Tether, Ether, Solana) it has no equal coun-

terpart. That is, 1 Tether coin is always equal to

any other 1 Tether coin (in case of tradtitioanl ﬁ-

nance 1 USD is always the same as any other 1 USD),

Lukash, S., Shapovalova, N. and Striuk, A.

NFTs: An Overhyped Gimmick or a Promising Technology of the 21st Century.

DOI: 10.5220/0012010100003561

In Proceedings of the 5th Workshop for Young Scientists in Computer Science and Software Engineering (CSSE@SW 2022), pages 86-92

ISBN: 978-989-758-653-8; ISSN: 2975-9471

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

whereas any given NFT does not have an equal coun-

terpart, hence the name “non-fungible”. The own-

ership of an NFT is recorded in the blockchain, and

can be transferred by the owner, allowing NFTs to be

sold and traded. Usually NFTs contain references to

images (art, generated characters, photos, animated

GIFs, or any other image), videos, music, etc. (ﬁg-

ure 1) (Ozone Networks, 2023).

Technically, it is possible for everyone to right

click an NFT art on any website and save it to the

hard drive, then use it as a regular image ﬁle – set it

as a screensaver, print it out or even go as far as to set

it as a proﬁle picture on Twitter (as many online trolls

do).

However, the main point of NFTs is not that only

the owner gets to view the artwork, rather they are the

one, who have the ownership of it. The ownership, in

turn, can be easily veriﬁed thanks to the transparent

nature of blockchain. All relevant data, such as trans-

action history, price and other attributes of an NFT are

also publicly available.

A good analogy for NFTs could be conventional

pieces of art. Such paintings as Mona Lisa by

Leonardo da Vinci do not exist in one single copy, in-

stead, it can be found everywhere: decorating various

establishments, on merchandise, in movies, on desk-

top wallpapers and so on. However the original is the

one that bears the real value, both artistic and mate-

rial. NFTs are a lot alike in this matter. Although

instead of experts who determine the original it is the

blockchain and its users, who all agree on what the

original is, who it belongs to and what is its price.

No matter the beneﬁts of this rising technology its

reputation still lags behind. NFTs are associated with

many controversies and are often considered to be a

gimmick and are expected by many to fade into obliv-

ion rather soon. It cannot be denied that this reputa-

tion is well deserved, since the technology is clearly

ahead of its time and is just starting to see truly prac-

tical applications.

For instance, an American inﬂuencer Logan Paul

bought an NFT from Azuki’s NFT collection for

$623 000, which is worth $10 today (ﬁgure 2) (Paul,

2022). It is the deals like this than make people won-

der if NFTs have any practicality.

3 PRACTICAL USE CASES

Having experience of working in various NFT

projects as a developer, in this article I would like to

provide you various ideas and examples of how we

can make NFTs useful and wipe off the questionable

reputation of this technology.

3.1 Fund Raising and Charity

The most obvious way that also removes most ques-

tions concerning the artistic value of an NFT is, of

course, fund raising.

There are several great projects that are also ex-

tremely actual that raise money for the support of

Ukrainian people, various funds, volunteers and, for

sure, the Armed Forces of Ukraine.

On of such projects is MetaHistory NFT museum

(ﬁgure 3), which is widely regarded and backed by

such organization as the Ministry of Digital Transfor-

mation of Ukraine.

Their “WARLINE” collection (Meta History: Mu-

seum of War, 2022) follows a chronology of events of

the Ukrainian history of modern times. Each token is

a real news piece from an ofﬁcial source and an illus-

tration from artists, both Ukrainian and international.

This helps not only to raise funds and raise awareness.

But also to record the history in a way, that can neither

be altered, nor destroyed.

One other project is a landing page for a part-

nership between Usyk Foundation and Blockasset.

The website was launched a couple of weeks be-

fore the “Oleksandr Usyk vs Anthony Joshua II” box-

ing match, which was a great way to gain atten-

tion. (More than that, the glorious victory of Olek-

sandr Usyk vastly improved sales). On this landed

page a collection of 2000 unique NFTs featuring

Oleksandr Usyk were being sold, each priced at $200.

This helped to raise $400 000 for medical and hygiene

supplies, food and much more. Blockasset has also

beneﬁted, as more people got interested in the project

in general and in Usyk NFT collection in particular.

The collaboration on raising funds has ended.

Regular Blockasset NFTs, featuring Oleksandr Usyk

and other athletes, can still be purchased on such plat-

forms as Magic Eden (ﬁgure 4) (Blockasset, 2022).

3.2 Decentralized Digital Assets

Marketplace

Another great use case for NFTs is creating and trad-

ing unique content, which has not only artistic, but

also practical value and can be used in commercial

or non-commercial purposes. The examples of such

content are photos, music, video clips and so on.

At the moment there a lot of such online mar-

ketplaces to be found. Such popular services as

Envato (Envato, 2023), Shutterstock (Shutterstock,

2023) and Epidemic Sound (Epidemic Sound, 2022)

have existed for quite a long time and have gathered

thousands of creators, clients and pieces of content.

NFTs: An Overhyped Gimmick or a Promising Technology of the 21st Century

Figure 1: NFT examples from OpenSea, one of the largest non-fungible token marketplaces.

Figure 2: A tweet by Logan Paul on his NFT purchase.

Such marketplaces can also be implemented us-

ing Web3 technologies. All these assets will beneﬁt

from transparent copyright law protection thanks to

the transparent nature of blockchain, and users and

creators can perform payments using cryptocurrency.

One of such projects is an NDA

project I am cur-

rently working on. Since it is completely conﬁdential

the good way to describe it is to talk about its closest

competitor – Releap.

Releap is a music distribution protocol where

artists can publish their tracks as a set of NFTs to

be discovered, enjoyed and traded on chain (ﬁg-

ure 5) (Rel, 2022).

This project aims to empower emerging and major

artists with new ways of gaining exposure, engaging

with fans and monetizing their work. With Releap its

possible to do such things as:

• Mint music NFTs that can interact with any

NFT DApp

(e.g. NFT exchanges, lending or

renting protocols) in the Solana ecosystem.

• Discover new music from our growing creator

community and directly support creators that user

NDA – non-disclosure agreement

DApp – decentralized application

CSSE@SW 2022 - 5th Workshop for Young Scientists in Computer Science Software Engineering

Figure 3: MetaHistory NFT museum ”WARLINE” collection page.

NFTs: An Overhyped Gimmick or a Promising Technology of the 21st Century

Figure 4: Usyk NFT collection page on Magic Eden.

loves.

• Buy and sell Solana music NFTs on Releap Ex-

change.

• Interact with music-loving community through

public posts and comments.

• Engage with collectors who have bought user’s

NFTs through gated posts using Releap Circles.

The same model of using NFTs for original con-

tent can also be applied to photos, videos, art and any

other digital assets.

3.3 Documents and Certiﬁcates

The problem of issuing and verifying documents dig-

itally is widely regarded, as of today. A great leap in

this ﬁeld can be contributed to the Ministry of Digi-

tal Transformation of Ukraine with their project Diia

(Diia, 2022), which was launched in 2020 and since

then has been helping Ukrainian citizens to use digi-

tal documents in their smartphones instead of physi-

cal ones for identiﬁcation and sharing purposes. Also,

the Diia portal allows access to over 50 governmental

services, all within the click of mouse.

The disadvantage of such service is its centralized

nature, were users heavily depend on the IT team of

Diia to keep everything stable, working as expected

and have 24/7 uptime. To mitigate these drawbacks

we could also make a good use of blockchain and

NFTs to emit, distribute and validate various types of

documents and certiﬁcates in a decentralized manner.

Thanks to the nature of blockchain it would be

easy to establish a speciﬁc account that would be

associated with a particular governmental or non-

governmental institution. This institution could emit

documents or certiﬁcates by means of minting NFTs.

The ideal documents or certiﬁcates for this use

case are the ones that do not contain sensitive infor-

mation, such as: diplomas, certiﬁcates, awards, tick-

ets, invitations, and others.

Other documents, such as driver’s licence could be

modiﬁed for Web3 to only contain non-sensitive in-

formation, such as the date of issue and vehicle types

that the barer is capable of conducting.

Documents, that contain sensitive information

could be still managed in a centralized manner.

There is number of advantages of the decen-

tralized approach in document management, among

CSSE@SW 2022 - 5th Workshop for Young Scientists in Computer Science Software Engineering

Figure 5: Releap – a platform for music NFTs on Solana.

them:

• Web3-based authentication

• transparency

• ease of validation

• impossibility to counterfeit

• absence of reliance on one speciﬁc web service

Such application of blockchain is yet to see light.

Ukraine is the ﬁrst country in the world to implement

electronic passports, so it is, for sure, early to discuss

a Web3 implementation for something that is yet to

come to the majority of the world.

On the other hand non-governmental documents

and certiﬁcates are rather common. Innovative on-

line platforms use NFTs in order to issue diplomas

for their online courses (especially when the course is

about Web3 technologies). And ecosystems, such as

Blockasset (Athlete-veriﬁed NFT and token ecosys-

tem, 2023) use NFTs to provide exclusive access to

content (videos, interviews, behind-the scenes clips)

and allow users to have a chat with their favourite ath-

lete in Discord.

4 CONCLUSION

As of today NFTs are associated with many contro-

versies and are often considered to be a short-lasting

gimmick and a subject for speculation. However it

appears to be not an issue of the technology itself, but

its use case. There is a wide range of options when it

comes to NFTs that bring the advantages of decentral-

ized applications into previously existing ﬁelds, some

of which were described in this article:

• fund raising and charity

• decentralized digital assets marketplace

• documents and certiﬁcates

There are many other use cases of NFTs which

were not mentioned in this article. Basically almost

everything we know today can be implemented in a

decentralized manner, what is required is a correct

and thoughtful implementation.

All in all, non-fungible tokens make a perspective

and promising technology which proves an important

and universal point – it is not a technology that should

be feared or praised, rather its application.

REFERENCES

(2022). Releap - Social NFT Platform on Solana. https:

//beta.releap.io/.

Athlete-veriﬁed NFT and token ecosystem (2023). Block-

asset. https://www.blockasset.co.

Blockasset (2022). Magic Eden - NFT Marketplace: USYK

— Blockasset. https://magiceden.io/marketplace/

usyk.

NFTs: An Overhyped Gimmick or a Promising Technology of the 21st Century

Diia (2022). Government services online. https://diia.gov.

ua/.

Envato (2023). Envato - Top digital assets and services.

https://www.envato.com/.

Epidemic Sound (2022). Royalty Free Music for video cre-

ators. https://www.epidemicsound.com. [Online; ac-

cessed 28-October-2022].

Meta History: Museum of War (2022). Warline: A

chronology of events of the Ukrainian history. https:

//metahistory.gallery/collection/warline.

National Bank of Ukraine (2022). The National Bank of

Ukraine is taking measures to ease demand in the FX

market’s cash segment and protect international re-

serves, and clarifying some provisions. https://tinyurl.

com/4r3bh9uy.

Ozone Networks (2023). OpenSea, the largest NFT market-

place. https://opensea.io/.

Paul, L. (2022). A tweet on NFT purchase. https://twitter.

com/loganpaul/status/1547314126698995713.

Shutterstock (2023). Stock Images, Photos, Vectors, Video,

and Music. https://www.shutterstock.com.

Soloviev, V. N. and Belinskiy, A. (2018). Complex Systems

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Mayr, H. C., Nikitchenko, M. S., and Spivakovsky, A.,

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TripleA (2023). Global Cryptocurrency Ownership Data

2023. https://triple-a.io/crypto-ownership-data/.

CSSE@SW 2022 - 5th Workshop for Young Scientists in Computer Science Software Engineering