UNT professor says NFTs aren’t passing fad, they can be viable options for permanent virtual record storage

Tuesday, July 19, 2022 - 09:03

DENTON (UNT), Texas — Non-fungible tokens may be the answer to some challenges presented by paper records, University of North Texas professor Kimberly Houser said.

According to the U.S. Government Accountability Office, non-fungible tokens (NFTs) are digital identifiers that represent a digital or physical asset. It estimates revenue from NFTs could pass $130 billion by 2030, advancing the digital economy.

In her forthcoming article in the Utah Law Review with co-author Oklahoma State University Assistant Professor John Holden, Kimberly Houser, a clinical assistant professor in the G. Brint Ryan College of Business, said that when examining the legal issues regarding NFTs, they realized that regulating NFTs would require updates in different areas of law depending on the actual use of the NFT. An NFT is created using blockchain technology and is simply stored data. However, what can be stored goes well beyond a Bored Ape Yacht Club digital collectable. This technology enables any type of record to be stored more securely. The NFT just points to the record.

“Everybody thinks of blockchain in terms of art and creating these things you could buy or sports trading cards,” Houser said. “We discovered that this underlying technology of blockchain with the use of NFTs has some other uses. In Africa, school children, for example, move around a lot. They go to a lot of different schools. It’s difficult for them because if they were forced out because of war, they have no access to everything that they've already done. Some of them are now using blockchain technology to create permanent academic records, which are held in NFTs.”

Once the NFT is recorded on the blockchain, it can’t be deleted, which creates an opportunity for records to be kept no matter where the child goes. It also can be used to track goods in a supply chain using RFID chips or replacing recording offices for deeds or corporate records.

“The promise of NFTs extends to virtually every industry; however, our present system is ill equipped to regulate their use,” Houser said. “NFTs and their underlying technologies offer incredible opportunities which could serve to make government more efficient, food and drug products safer and provide a method to create immutable records while protecting the data contained therein. Those who discount NFTs as a fad are missing the bigger picture.”

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