In this article, we’ll dive deep into the fundamentals and advantages of blockchain that offer cryptographic digital ownership of assets. In addition, we’ll look at different industries that are benefitting from introducing provable digital scarcity into their product range. Finally, we’ll discuss how and where to check and verify blockchain proof of ownership using block explorers.
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What is Blockchain Proof of Ownership?
The ability for blockchain proof of ownership across a range of different assets is essentially thanks to the introduction of non-fungible tokens (NFTs).
“Yeah, I heard about NFTs; they’re basically like fancy JPEGs, aren’t they?” – well, no. Not really.
Unlike fungible cryptocurrencies, non-fungible tokens (NFTs) represent unique pieces of data on the blockchain. Users can buy, trade, and invest in NFTs as assets rather than using them as a medium of exchange. Also, unlike cryptocurrencies that are divisible into smaller units, NFTs are whole assets sold in a single transaction (there are, however, some exceptions with fractional ownership NFTs).
Many people believe that an NFT offers no more utility than a JPEG image. However, this is categorically incorrect. The beauty in NFTs is the blockchain proof of ownership, or proof of authenticity, with cryptographic backing and provable digital scarcity.
NFT standards allow for the tokenization of just about anything on the blockchain. Plus, each piece of data on the blockchain becomes immutable upon entry. This means that other users cannot alter or adjust any data already present on the chain. In turn, this presents a cryptographic blockchain proof of ownership or authenticity of data, with mathematical verification of the validity of NFT transactions.
Features of Blockchain Technology
In addition to digital ownership, blockchain boasts an array of favorable advantages. The technology can operate using either a public or private blockchain. With public chains, anyone, anywhere, can view all current and past transactions happening on the chain. Later in this article, we’ll discuss exactly how we can view and search for any blockchain transaction.
The proof of authenticity and digital ownership is securely transparent, displaying cryptographic hashes representing users’ wallet addresses. These are known as public keys. Only people who have access to the corresponding private keys can access the hashed data, making blockchain one of the most secure data-sharing technologies.
Further to the publicly transparent digital ownership, blockchain technology offers mathematically verifiable digital scarcity of an asset. Scarcity is a key value proposition for any currency or deflationary asset. In a free market, the scarcity (supply) and demand for an asset determine its value. Blockchain offers reliable, accurate, and trustless records of verifiable digital scarcity of an asset.
Also, blockchain is a permissionless, borderless, and censorship-resistant technology operating through a global network of computers called nodes. This means that anyone can take advantage of blockchain proof of ownership regardless of age, creed, status, or location.
Industries using Blockchain Proof of Ownership
We now understand how blockchain can improve digital ownership. Below, we’ll discuss the various industries integrating this technology. Plus, we’ll discuss the future opportunities for industries to be able to offer cryptographic, provable digital scarcity of their products.
The fashion industry is notorious for falling victim to fake luxury goods, costing high-end fashion houses more than $30 billion each year. According to Organisation for Economic Co-operation and Development (OECD), in 2019, the counterfeiting trade (commonplace in fashion) accounted for 3.3% of world trading, exceeding $500 billion per annum. Introducing blockchain technology can ameliorate this issue.
For example, legitimate designer goods are introducing QR code tags that offer blockchain proof of ownership. Consumers can scan the code to register their item on that brand’s application or chain. Moreover, with limited edition goods, this offers cryptographic transparent digital scarcity. Also, some leading global fashion designers are introducing their own non-fungible token (NFT) collection. Accordingly, devotees of fashion brands can take their engagement to the next level, offering a new range of NFT assets providing digital scarcity and blockchain proof of ownership in the metaverse. Famous fashion brands integrating NFTs into their ranges include Vogue, Gucci, Prada, and Cartier.
Over the past 30 years, becoming a self-sufficient musician has become an increasingly tricky career to pursue. This is mainly due to the hefty cuts of profits taken by managers, labels, promoters, etc. With the rise of centralized internet streaming, illegal music piracy, and intellectual property rights, income sources are drying up.
With that said, blockchain presents a convenient and opportune solution. There can be no more illegal pirate downloads with immutable blockchain proof of ownership and cryptographic protection over each song. Moreover, musicians can receive real-time royalty payments every time their song is played. In addition, blockchain can offer transparency of artists’ digital ownership of songs, videos, and other artistic creations.
The presence of non-fungible tokens (NFTs) in the art industry is often when the JPEG comparison will arise. However, the value of a painting is most often influenced by its scarcity and artist. Using the infamous Mona Lisa as an example, hundreds of thousands of images are available of the painting. Despite this, the historical artwork by Leonardo da Vinci still holds its value, as it is the original piece. It is a globally-accepted fact that the original artwork is housed in the Parisian Louvre museum. Any other image is fake and worthless. Blockchain technology operationalizes the community value of rarity online, proving transparent, verifiable digital scarcity on a public chain.
Furthermore, introducing blockchain into the art industry will benefit both artists and consumers like never before. Proud owners of rare paintings can use a QR to register their possessions, offering blockchain proof of ownership. This is immutable and will offer public transparency of the history of sales. Traditionally, artists will make a commission on the initial sale of their artwork. From then on, the transactions and movements of their work are no longer available to them. However, using smart contracts with blockchain, artists can receive a percentage commission on the initial and every future sale of their work.
Digital ownership of artwork and collectibles by artists is growing as a global trend as society slowly transitions into the metaverse. As such, during that time, digital ownership of assets with transparent, verifiable scarcity will become increasingly commonplace.
The collectibles market also benefits significantly from introducing blockchain proof of ownership. Blockchain can make it easy to provide transparent digital scarcity of rare items and scarce assets. Moreover, blockchain introduces the opportunity for cross-game interoperability. Users can purchase NFT collectibles in one application then use or display said asset in another application. Also, blockchain technology offers a range of all-in-one solutions for digital ownership of assets. This includes the likes of Web3 wallets, such as the leading Web3 browser wallet – MetaMask.
To learn how to install, navigate, and use MetaMask across a range of blockchain applications, see our DeFi 101 course! Or, to check out Web3 browsers, see our “Web3 Browsers” article. At Moralis Academy, we provide all the educational material one needs to begin a journey into decentralized finance (DeFi). Check out the largest Web3 development education suite online today at Moralis Academy!
After non-fungible tokens (NFTs) made headlines in the gaming, art, and music industries, the mass adoption of NFTs is now emerging in the sports industry. Counterfeit sporting and team merchandise is a difficult hurdle to overcome, facing similar challenges as the fashion industry. However, proof of ownership can offer a solution to this.
In addition, blockchain can add valuable provable digital scarcity of esports NFTs and tradable assets. Further, the transparency of blockchain in this industry can extend to a club’s accounting figures, including income and expenditures reports. The UK Real Bedford FC team was recently bought by Nakamoto 11 Ltd. The company is introducing unprecedented strategies, such as publishing its income report on the blockchain.
Proof of ownership on the blockchain will eventually remove the need for realtors or estate agents. This is because all necessary information is immutably stored on the blockchain. With this cutting-edge technology, people can tokenize their houses as NFTs on the blockchain. As such, a peer-to-peer housing market is likely to emerge as digital ownership evolves with next-level technologies.
Blockchain technology presents a novel opportunity for more accessible real estate purchases abroad. Also, first-time buyers could opt for property overseas without the stress and hassle of realtors or lawyers. Smart contracts can generate a decentralized escrow account that can only transfer ownership of land deeds upon receiving the total amount requested. Plus, introducing blockchain proof of ownership in the real estate industry makes it easier if one was to give or sell their house to a close relative or friend.
Supply Chain Management
The supply chain management industry covers a variety of sectors within the work line. Also, supply chains are found across a range of different industries. The advantages of blockchain integration are apparent even from the beginning of the supply chain, offering blockchain proof of ownership of raw materials. This adds an extra layer of quality control right from the beginning of the work line.
Food – In the food industry, blockchain and internet of things (IoT) devices can provide reliable temperature control of food in transit. Plus, smart contracts can determine the inventory management of goods monitoring the “use by” and “sell by” dates and origin of food. Also, blockchain could offer transparent digital ownership of veg or meat farms for end consumers through QR codes.
Healthcare – In the future, the healthcare industry could offer medical records with blockchain proof of ownership. Patients could create and have true digital ownership of their medical history as a non-fungible token (NFT). As such, general practitioners (GPs), specialists, and surgeons could receive secure private keys to access the data. As a result, communication and efficiency between staff, departments, and hospitals will drastically increase.
Customer Service – The customer service industry could potentially indirectly benefit from cryptographic digital ownership. The increase in access and communications efficiency of multiple databases due to the blockchain proof of ownership throughout the supply chain makes it far easier to resolve customer concerns. Plus, customer service staff could have seamless, interoperable, and secure access to various databases throughout the supply chain. For a deep dive on this topic, save our “Blockchain in Supply Chain” article for later!
How is Digital Ownership of a Digital Asset Shown on the Blockchain?
Each transaction on a blockchain is akin to carving into stone; it’s immutable. A transaction will forever be mathematically hashed and cryptographically intertwined among millions of other transactions. Also, the transactions are publicly accessible and available to view by using a chain’s native block explorer.
A block explorer can provide all the relevant information surrounding a transaction on a blockchain. Each blockchain has its own block explorer or explorers. Block explorers can be thought of as a search tool, requesting insights into specific transactions. Each block explorer varies slightly, but users can search by wallet address, token address, or transaction confirmation hash with most explorers. Accordingly, anyone can verify the digital scarcity of a token. Also, anyone can check the public digital ownership of particular assets.
Below, we’ll list a few different examples of block explorers on different blockchains:
Ethereum – etherscan.io
Binance Smart Chain (BSC) – bscscan.com
Avalanche – avascan.info, snowtrace.io
Solana – solscan.io, solanascan.io
Cardano – cardanoscan.io, adaex.org
For an in-depth breakdown between two of the top ten blockchains, be sure to save our “Cardano vs Solana” article for later! In addition to public block explorers, there is an increase in decentralized applications (dApps) offering utility and space for social flexing of users’ digital ownership of NFTs. This is likely to continue with the growing demand of NFT holders wanting to flaunt their new on-trend assets.
Exploring Blockchain Proof of Ownership – Summary
Blockchain technology presents the perfect solution for taking digital ownership to the next level. Offering transparency, decentralization, and cryptographic security, blockchain proof of ownership applies to a range of different industries. This includes the fashion, sports, music, and supply chain management industries. Further, blockchain offers users mathematically verifiable digital scarcity of assets, ameliorating fraudulent and counterfeit industries.
In addition, blockchain can be similarly applied to the energy sector, but in reverse. For example, instead of proof of ownership, using blockchain could provide proof of energy expenditure. The possible use cases for blockchain are endless! To learn how to integrate blockchain into your business, or become a blockchain project manager for someone else’s business, check out our Blockchain Business Masterclass course! Even with no programming experience, students at Moralis Academy discover how to manage a team of developers and blockchain projects. Plus, you’ll learn how to integrate decentralized features into existing centralized IT systems! Start your blockchain career at Moralis Academy today!