Visa NFT White Paper: A Practical Guide to Expanding NFT Opportunities

After the US multinational financial services company Visa spent a huge amount of US$150,000 to purchase Crypto Punk, it has taken a further step-publishing the NFT white paper “Engaging Today’s Fans in Crypto and Commerce” (to allow today’s fans to participate in encryption and commerce).

This white paper shares insights and observations on the prospects of NFT, and a practical guide on how to evaluate and expand NFT opportunities.

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How to define NFT

Like cryptocurrencies, NFTs are issued on the blockchain to specify the ownership of specific assets. Each NFT is associated with some unique data, usually some kind of digital content file (or a reference to it), and is managed by a smart contract. The process of converting media files into NFTs is called “minting” NFTs, and just like cryptocurrency, the NFT is written into the applicable blockchain database. Unlike cryptocurrencies, NFTs are irreplaceable, which means that each NFT is unique and cannot be interchanged with other NFTs

Three NFT application scenarios

Visa believes that the current main application scenarios of NFT are mainly three areas: collectibles, art and games.

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Collectibles: The digital scarcity realized by nft is naturally suitable for those collectibles or assets whose value depends on limited supply. Such as CryptoKitties, CryptoPunks, and NBA Top Shot.

Artwork: NFT enables artists to sell their work in a natural form, rather than having to print and sell artwork. In addition, unlike physical art, artists can earn income from secondary sales or auctions to ensure that their original works are recognized in subsequent transactions. Such as Nifty Gateway.

Games: Due to the ownership opportunities introduced by NFT, it also provides important opportunities for gaming. Although people spend billions of dollars on digital game assets, such as buying skins or clothing in Fortnite, consumers do not necessarily own these assets. NFT will allow players who play encrypted games to own assets, earn assets in the game, transplant them out of the game, and sell assets in other places (such as open markets).

In addition, Visa pointed out that at this stage, selling art and collectibles is the main application scenario of NFT. However, there are still potential development opportunities in the fan economy.

Visa said that an exciting aspect of NFTs is their composability. As the ecosystem develops, NFTs can be designed in a way that spans multiple use cases. This long-term utility allows players to participate in the game more deeply, and ultimately create more valuable NFTs, thereby generating additional revenue in secondary sales or auctions. This field has huge potential and can span multiple stages of customer experience: fan incentives, meta-universe, ticketing, fan governance, and decision-making.

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After Visa purchased the NFT, Cuy Sheffield, the head of Visa’s cryptocurrency business, also said that in the foreseeable future, NFT will play a key role in retail, social media, entertainment, and commerce. According to Sheffield, Visa believes that NFT will play an important role in the future of business and can help individual content creators and small and medium enterprises in new ways.

How to create NFT

1. Choose the right blockchain

Choosing the right blockchain requires evaluating multiple dimensions of trade-offs, including throughput, transaction costs, existing application ecosystems, and the degree of decentralization. The ideal infrastructure will support multiple blockchains and achieve asset interoperability between blockchains.

In this regard, Visa mentioned Ethereum and Flow .

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Visa pointed out that Ethereum is one of the largest blockchains, with a strong ecosystem of users, developers, wallets, and applications. Most NFTs are built on Ethereum. However, the Ethereum Gas fee is not friendly to small NFT traders, and the application of Layer 2 can solve these problems well.

Flow has also attracted much attention from the NFT market. Considering that it is still in its early stages, developers and application ecosystems are still relatively limited. However, Flow already has a very successful case NBA Top Shot. Blockchains like Flow are gaining more third-party adoption.

2. Create NFT

There are several platforms that can help cast NFT. OpenSea and Rarible are positioned at any creator, Bitski, Nameless (NFT42) are more focused on brand support and larger creators.

3. Store NFT

Visa points out three forms of storing NFTs:

Store directly on the blockchain: Due to the limited storage capacity allocated by the blockchain software, the allowable file size may be quite small. At least for now, many companies find it expensive to store digital content directly on the blockchain.

Decentralized storage: Decentralized storage does not depend on a single entity. The developers of these peer-to-peer storage protocols provide varying degrees of storage durability for different price points. Such as Arweave.

Centralized storage: cloud storage.

4. Store and access NFT

There are two main models of wallets: “custodial” or “non-custodial”. Consumers who interact with cryptocurrencies generally prefer the “non-custodial” model because it gives them complete control of their assets. For example, platforms like SuperRare and OpenSea integrate non-custodial wallets, which means that consumers are responsible for storing private keys securely so that they can access and trade their NFT. Each platform can connect to a specific third-party encrypted wallet. Provide users with encryption and security.

In contrast, managed solutions can help a wider audience and easily access enterprise platforms. If you use a hosted solution, the most important thing is to choose a trustworthy and strong security brand, because it will represent the consumer’s NFT that is responsible for custody.

Visa’s encryption plan

Currently, Visa is cooperating with more than 50 leading encryption platforms to make the conversion and consumption of encrypted assets simpler in the 70 million merchants accepting Visa cards worldwide.

Visa is upgrading its infrastructure to enable stable currency settlement, through the Ethereum network, starting with USDC.

In addition, Visa has also established a research team in the blockchain field to explore the fields of cryptocurrency and NFT from a commercial perspective. The white paper pointed out that as a leader in the field of digital payment, Visa has the responsibility to lead and promote the discussion of business models, including the fields of cryptocurrency and NFT. Visa has been exploring blockchain technology for several years, such as offline digital currency transactions and new cryptographic technologies that can protect privacy.

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Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/visa-nft-white-paper-a-practical-guide-to-expanding-nft-opportunities/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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