Have you also heard about NFT but don’t really understand the concept?
In the last couple of months I have heard once or twice people mentioning NFTs, so I decided to really get into the subject and learn exactly what they were.
What are they and how do they work
NFTs stands for Non-Fungible Tokens, they have been around since 2014 but have really become a trend in the past few years. Non-fungible means that it is a non replaceable item. As such it can be anything that is digital and irreplaceable such as an image, a meme, a video, a music, a tweet and so on. People have spent millions on some NFTs, as an example; the twitter co-founder sold his first ever tweet as an NFT for more than 2.9 million dollars.
Once you buy an NFT that means you own the ‘original’, people can still find it and see it on the internet but you become the owner. The NFT contains a built-in authentication, which proves this ownership. Without going into too many details, NFTs exist on a blockchain which is distributed on a public ledger, maintained by thousands of computers around the world, that record every transaction (a bit similar to a bank when it comes to your bank account). If you have a hard time understanding this, I would suggest watching the following youtube video where the concept of NFT is explained as well as blockchain: https://www.youtube.com/watch?v=Oz9zw7-_vhM
You might then think that cryptocurrencies are NFTs but no, cryptocurrencies are not NFTs. For example a doge coin is fungible because you can simply trade one for another dogecoin and you’ll have exactly the same thing. The only similarity they share is that both have records on a blockchain.
What is the purpose of NFTs
Anyone could create anything digitally and sell it as an NFT, so it can be a huge opportunity for artists or even some companies. As a buyer on the other hand you could hope for the value of it to go up and make a profit out of it, until then you have the rights to use it as you like. But in my opinion NFTs are quite uncertain as we don’t know if this trend will continue or just stop at a certain point.
People might think that it is the new digital art collecting. Do you think it could be the future of art collection? I definitely believe that it has become a new way of collecting art but I remain unconvinced on whether it will continue on forever. In the end how we value things is shifting because of technology.
References:
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
https://www.forbes.com/advisor/investing/nft-non-fungible-token/
