NFT : The Future Of Information Exchange

NFT: The Future Of Health Information Exchange?

By Ayo-Olagunju Muna

NFT is not an entirely novel concept as its origin can be traced back to a 2012 concept paper by Meni Rosenfield titled “Colored coins” putting it at almost a decade old (Hamilton, 2022). ”

NFT – buzzword? Cool-kids lingo? Tech-jargon? Attention grabber? Ooops…busted! Perhaps that’s what was just needed to get your attention. Well, since you’re here, you might as well just read along. NFT is not an entirely novel concept as its origin can be traced back to a 2012 concept paper by Meni Rosenfield titled “Colored coins” putting it at almost a decade old (Hamilton, 2022). The creation of the first actual NFT, “Quantum” is attributed to Kevin Mccoy and Anil Dash in 2014. It was a video created by Kevin’s wife Jennifer, he registered it on the Namecoin blockchain, eventually selling it to Dash for $4 (Wikipedia Contributors, 2022). Now let’s come back to the present, imagine selling your tweet for $ 2,900,000 (Zlatev, 2022) (well, that probably wouldn’t happen unless you’re Twitter’s former CEO, Jack Dorsey), or selling the picture of this Ape above, which you can easily download of the internet, that is if it’s not already your wallpaper, for $ 3,408,000 (Tahelyani, 2022) or this digital collage for a staggering $ 69,000,000 (Zlatev, 2022). From a financial context, from its humble beginnings, it is quite easy to see why the world is buzzing about ‘something’ that within so short a period has grown to a $ 41 Billion industry as of 2021(Conti, 2022). It is so ubiquitous on the internet, that it is now impossible to ignore.

Jack Dorsey's now infamous first tweet

NFT is short for Non-Fungible Token. According to the Merriam-Webster online dictionary, something is said to be fungible if it is of such a nature that one part or quantity may be replaced by another equal part or quantity (Merriam-Webster Dictionary, 2022). A non-fungible item would essentially mean such an item is unique and can’t be replaced with anything else.

NFT is a unique unit of data on a blockchain that can be linked to a digital or physical object, to provide immutable proof of ownership (Creighton & Summers, 2022). NFT turns your digital asset into one of kind, by creating a unique digital signature, which defines the ownership of your asset, making it unique. It is built using the same type of technologies as cryptocurrencies, such as; Bitcoin and Ethereum, but that is about the similarity between NFT and cryptocurrencies.

In stark contrast, cryptocurrencies, similar to fiat currencies are fungible. For instance, a $ 500 bill is equal and can be exchanged for five $ 100 bills, as they are equal in value. Similarly, 1BTC is equal to a given amount of Dollar value. However, 1 NFT is not equal to and cannot be exchanged for another NFT. NFTs majorly exist on the Ethereum blockchain network. Blockchain technology is the underlying foundation of NFT and understanding how it works, is crucial to understanding the working of NFT.

Let’s take a crash course into what a blockchain is. A blockchain, as the name suggests is a chain of blocks that contains information (Simply Explained, 2017). This technique, first described in 1991 was intended for use in time-stamping documents, pretty much like a notary. It remained largely unused and was brought into prominence in 2009 by Satoshi Nakamoto who is regarded as the father of the cryptocurrency Bitcoin.

A blockchain is an immutable distributed ledger used to hold information. A block typically contains data, a cryptographic hash (which can be likened to a fingerprint, since it is unique), and a link/address to a previous block (which is equally a hash). The block type is dependent on the nature of data that is contained within it. A cryptocurrency block would typically contain information about the transaction attributes like; sender, receiver and amount.

Once a block is created, changing something inside would automatically change the hash, likewise tampering with a block within the chain, meaning it is no longer the same block, thus preserving its property of immutability. Now that you have a high-level overview of blockchain and its technical plumbings, being the underlying technology of NFT, it would help in driving home some key concepts associated with NFTs.

Blockchain Illustration

NFTs are digital tokens that live on a blockchain and represent ownership of unique items and its rise to prominence can be largely attributed to creatives. Well, how is this helpful you may ask? Tracking a digital item can get a bit tricky, as it can be copied and distributed effortlessly, so how do you ascertain the true ownership, when everyone has an identical copy of the file? For illustration, if you create digital artworks, you can mint an NFT to represent this ownership. The token would typically contain A unique fingerprint (hash), token name, token symbol & optionally a link to the file posted on IPFS (InterPlanetary FileSystem). This token is stored on a blockchain and you, as the artist becomes the owner. You can sell this token by creating a transaction on the blockchain, which keeps track of the current owner of the token, the amount it was sold for and the buyer. The immutable property of the blockchain preserves the integrity of the information contained within it. It is important to note that the digital artwork itself is not stored within the NFT nor the blockchain, only its attributes. Where it gets interesting is that when you purchase an NFT that represents an artwork, you do not get a physical copy of it. The NFT represents ownership and it is stored in a blockchain, making it tamper-proof. They merely earn you digital bragging rights as you don’t own the actual physical copy. While the token owner owns the artwork, the creator maintains the copy and production rights.

Coming from the article opener up to this point, I bet you’re asking yourself, still, why would anyone want to pay almost 3 Million Dollars to own a tweet? At what point does it make sense exactly? Well, NFTs can be likened to securities like stocks, which are similarly intangible and somewhat speculative in nature. The value ascribed to an NFT is speculative, it is the premium someone is willing to place on it, which is usually sentimental. A practical example would be the case of Dorsey’s NFT Tweet, which was purchased for almost $3 Million, and has plummeted in value by almost 99%, being able to garner a bid of only $280 on bid day and plateauing at its current present value of circa $10,000 (Winters, 2022).

If you’ve been following the article, you would very easily see the applications of NFTs in the creative industry. At its core, NFTs are best suited for trading digital art, which includes, but is not limited to; visual art, and digital records. As an artist, you can purchase an NFT to make your digital asset unique, this creates a unique digital signature (a hash) which defines ownership of the asset, making them distinct and easily identifiable. You can then proceed to participate in online auctions without the threat of forgery or

Beeple: Everydays - The first 5000 days. Mike Winkelmann, better known as Beeple, is a South Carolina graphic designer and motion artist who has famously been creating a picture every single day for the last 13 years - not missing a single day for 5,000 straight days. These works, better known as Everydays, have formed one of the most celebrated bodies of work in the history of digital art

counterfeiting. Beyond the rudiments of buying and selling, they can be tied to smart contracts which can be used to factor in seamless royalty payments for subsequent re-sell of the item. Essentially, they can be applied across various sectors to validate anything that is unique and requires proof of ownership. Having examined its most basic use case, let’s begin to explore its other real-world applications

The ticketing industry can apply NFT in ticket sales. According to a poll by CNBC, about 12% of people who purchase online tickets get scammed (Leonhardt, 2018). NFTs can help with this as it makes it easier to verify ownership, authenticity and ownership transfer, transparently, with an option to make these tickets non-transferable. A company called GUTS is already ahead with this.

Document verification can be more seamless and fraud-free. Recruiters and hiring managers can easily verify academic credentials. It is additionally possible to verify the authenticity and integrity of documents such as; passports, certifications, licenses, birth certificates, etc. In the not-toodistant future, issuing these hard copy documents would be a thing of the past, making way for their NFT equivalents. Blockcerts is already ahead with this implementation, leveraging the blockchain, though they are yet to incorporate NFT. They can be used to verify the ownership of real-world assets such as; cars, houses, lands, bonds, etc. They can help greatly reduce the occurrence of fraud stemming from identity theft.

The supply chain and logistics industry can make use of it to track the timestamp and metadata of an item, along each stage of the chain to uniquely identify an item. The tamper-proof nature of NFT would guarantee the authenticity of the item and promote transparency within the supply chain. IBM Food Trust is an example of a blockchain-based supply chain solution, its underlying technology supports the use of NFT.

They equally have applications in voting processes, owing to their outstanding attribute of being immutable and unique. NFT denoting voter registration can be issued to individuals, this goes without saying, it would store sensitive registration data pertinent to the individual, which is tamperproof and transparent (owing to the decentralized nature of the blockchain) and would certainly improve the integrity of any electioneering process. This is not just a concept idea, as a 12-year-old Philippine already implemented this in 2021, during the lockdown. Interestingly, it was all done in the span of a month (Lay, 2021)

Finally, the elephant in the room. Having found various use cases in other sectors, you might wonder what use it would be to the health sector, especially with an emphasis on health information exchange. Its strong distinguishing properties of uniqueness and immutability which have earned its stake in other sectors, make it shine brightest in the health sector, where privacy and security are its ethea.

With big data, AI and machine learning moving to the forefront of clinical research and development, Personal Health Information (PHI) has become more sacrosanct (Gold, 2022). The health data marketplace is already an established Billion-dollar industry, with several actors usually ranging from big pharma, hospitals, health tech companies and other commercial entities. The patients, who generate the raw material for this industry are often marginalized, being reduced to spectators in the entire process. NFTs however would go a long way in changing this narrative. It would democratise and bring transparency to how PHI is exchanged, with a possible incentive of monetization for the patients can now take full control and responsibility of the PHI, deciding what data is shared, with whom and under what conditions. Patients’ can use this degree of control to monetize their PHI, which would be beneficial to them, rather than it being solely beneficial to the corporations, which is the case right now. NFTs through smart contracts can be programmed in such a way that the Patient earns future royalties for the use of their PHI. Asides from its commercial benefits to patients’ the decentralized nature of the NFT blockchain would go a long way in securing and preserving the integrity of medical information exchange.

NFTs are still in their infancy and there is only as much data to back their stability as a financial instrument, as is available on cryptocurrencies. However, it is barely starting its journey of use-case discovery, having fast found several practical applications in various sectors, with other limitless possibilities that extend well beyond bridging the gap between the digital and real-world as value carriers and a medium of ownership rights.