NTT s— Non Transferable Tokens
We have seen cryptocurrency grow from just the rave surrounding Bitcoin to a whole new range of use cases. We experience the usefulness of blockchain technology in virtually all sectors of our daily lives like health, real estate, and finance. If you are reading this, then I am almost certain that you must have heard about NFTs (Non-Fungible Tokens).
Just like me at the beginning, the name “Non-Fungible Tokens” does not make it any clearer, and hearing about it for the first time makes you wonder why people dole out thousands of dollars for the same art I can download into my gallery. Here’s the deal, Non-Fungible simply means unique, and it cannot be replaced with something else. In essence, Bitcoin and fiat dollars are fungible assets because they can be traded for the same thing but a BoredApe or Cryptokitties are Non-Fungible assets because if you trade them for one another assets, you get something entirely different.
NFTs can be anything digital such as drawings, music, pictures, memes, and the list never stops. NFTs were designed to show ownership of a work, to give us something that cannot be copied. Actually, anyone can take a screenshot of a particular BoredApe NFT but only one person owns that particular NFT as each NFT is completely unique and not divisible. An NFT creator has the ability to create scarcity of the asset and NFT can have only one owner at a particular time but there is an easy transfer of ownership. Asides from that, NFTs are the closest model in making sure an asset belongs to just one owner.
Fungible tokens (Bitcoin, Ethereum), and NFTs have different uses and they are unique in their own rights but what if we can all flex on the sole ownership of a particular asset? These concerns have led to the development of NTTs known as Non-Transferrable Tokens.
Non-transferrable tokens are as straightforward as they sound; ownership cannot be transferred. You either own it or you don’t. NTTs can be used for several reasons and some of the reasons are; To give rewards, grant licenses, show proof of attendance, in governance protocol, etc. NTTs will definitely prove who is who based on ownership. The introduction of NTTs (Non-Transferrable Tokens) does not disapprove of the importance of transferable tokens in any way because what is the usefulness of an asset if it cannot be exchanged for other assets.
We can see the usefulness or should I say, the importance of NTTs in POAP. POAP stands for Proof of Attendance Protocol where projects send NFTs to users that participated in their events. How do we know who actually attended these events if these NFTs can be transferred? It makes absolutely no sense for me to attend an exclusive event and then receive a POAP badge for it and then someone buys the badge from me. I can compare it to going for a driving test and selling my license to another person, that should definitely count as a criminal offense in any country.
One of the foremost concepts of blockchain technology is Decentralisation which is the absence of central authority and that is why we set governance protocols for decision making it is only fair to make it impossible for a user to buy more rights or privileges because it flaws the whole essence of decentralization as the wealthiest or power tasty minority can accumulate undue governance rights.
NTTs are at the early stage and it comes with their own challenges. For example, if I own a particular NTT and I think my wallet is being compromised, how do I transfer my NTT to a new wallet? In a blog post by Vitalik (CEO of Ethereum), he proffered some ideas that can help in the adoption of NTTs. He highlighted the need to adopt proof-of-humanity profiles to prove that the original owner is also the current owner of an asset. This makes it possible for assets to be attached to a particular user.
Also using Domain Naming Service, tokens are bound to a Domain name service. This idea is dependent on the fact that the users care about their names and they are not willing to transfer them. It is one simple approach to the adoption of NTTs but as time goes on, they will definitely be another approach to make it possible for us to use NTTs at all convenience.
