Non-fungible tokens or NFTs are dropping in digital wallets and popping up in headlines everywhere. If you’re like most people, you’re still trying to figure out what the fuss is all about. Especially when you read that a digital stick for your dog can be fetched for $1200. Not satisfied with just a virtual asset? No worries; Twig also comes with a physical stick collected from the streets of New York that you can artfully display in your living room if you’d rather not have Fido gnaw on it.
Digital artforms of the NFT variety can be spendy too—at the end of 2021, Merge earned its creator over $91 million in a matter of 48 hours, garnering it the top spot of highest-grossing NFTs to date.
But if you think NFTs are just frivolous digital playthings or collectibles for the uber-wealthy, think again. The blockchain technology behind NFTs makes it a powerful tool for various industries, and the automotive space is no exception.
The Basics of NFTs
The reason companies like Carnomaly recognize the value in NFT ownership lies in the blockchain technology behind it. What we’ve discovered is that NFTs are more than just wacky art pieces featuring apes or non-fungible toilet paper—anything can be tokenized using Ethereum’s ERC721 token standard or through other blockchain platforms. NFTs are minted through smart contracts built on a blockchain that are essentially deeds for digital and/or physical goods. These smart contracts are digital contracts where the terms of the agreement between users are set in code. Smart contracts automatically execute when pre-determined conditions are met.
It’s truly revolutionizing the concept of ownership, and here’s why:
NFTs are immutable.
Immutability is a property of the blockchain in which NFTs are recorded and transacted. Quite simply: it’s the unique ability of a blockchain ledger to remain unchanged. Unlike other databases, you cannot manipulate the data in a blockchain. Once the smart contract for the NFT is created, it cannot be altered. This means the NFTs you buy will never lose functionality.
NFTs offer sole ownership.
Once an NFT is purchased, the unique certification within the smart contract protects it from duplications. Each NFT confers sole ownership of a digital/physical asset via the blockchain to a single account.
Why NFTs Could Be the Future of Car Ownership
Taking a look at motor vehicle titles, it’s only natural that a progression from a paper title or e-title stored on a centralized cloud to a completely blockchain-based proof of ownership like an NFT makes sense. Replacing a traditional motor vehicle title with a smart contract-enabled one completely digitizes and records proof of ownership in a secure manner. Just like we mentioned previously, once you purchase the NFT—and in this case, the vehicle it represents—everything about the title and transaction is stored safely in one place and remains immutable.
Moving It Forward: Digital CarrChain Records
Taking it one step further, what if you were able to take that auto’s NFT and attach it to a complete digital car management system? You manage just about everything online these days, but what about your car? Owners will soon be able to convert everything about their vehicle to a digital record, including its comprehensive history—oil changes, tire rotations, recalls, insurance claims and more. One way car owners can utilize this exciting technology is by registering their vehicle with Carnomaly’s CarrChain blockchain-based solution.
CarrChain will allow people to quickly add their vehicles through something called VIN-scan technology, which as you probably guessed, utilizes the vehicle’s unique VIN or “Vehicle Identification Number.” Once the vehicle is registered with CarrChain, it automatically generates a DVIN or “Digital Vehicle Identification Number,” which is an NFT for the vehicle stored on Carnomaly’s blockchain-based platform.
Each detail within the digital vehicle profile is safely stored within the blockchain database, identified by the exclusive DVIN. Now, all vehicle history details can be recorded and stored digitally through the intuitive app. Everything about the vehicle is tied to one easily tracked and maintained digital ledger. When the car is sold, these comprehensive digital records will be transferred with the vehicle, easily obtained with just a few clicks.
The Benefits of NFTs
NFTs streamline the process
People who are conscious of paper waste will rejoice over the amount of paperwork that’s potentially eliminated by NFTs. And for those who are extremely time-conscious instead, these smart contracts help cut the tedious traditional paper-filing and shuffling that exist within the current motor vehicle titling system. In-person visits to the dreaded DMV would be a thing of the past. With a blockchain-based NFT, everything about the title of the vehicle would exist digitally forever within the token, making for a streamlined process once it came time to buy or sell.
NFTs eliminate intermediaries
Each smart contract that powers the NFT aims to simplify business between both anonymous and identified parties, sometimes without the need for a middleman. Buyers and sellers can trust the one source of truth that NFTs provide because all of this vital data is updated in real-time utilizing secure blockchain technology.
NFTs establish trust
With data breaches like the big hit the California DMV took last year, with 38 million records potentially compromised, blockchain-based tech seems like a move government agencies should make. When thinking about the smart contracts behind NFTs, the critical element is trust. The distributed properties of blockchain ledgers make them impregnable and immune to alterations.