Non-fungible token (or NFT’s for short).
Three words that you might not have heard of but will hear plenty of over the coming weeks and months.
Just like when the words ‘cryptocurrency’ and ‘blockchain’ entered the digital narrative, there was a fair amount of head scratching.
In this modern era of digital assets, which all of the above fall into, there’s no knowing where this will lead, however, we’ll attempt to scratch the surface of NFT’s and keep you ahead of the curve.
What’s an NFT Crypto?
As we’ve already said, an NFT is a non-fungible token, which essentially means that it cannot be replaced for anything else. Ergo, it’s unique.
To make it a little clearer, let’s say you have a digital trading card NFT. That is non-fungible in the sense that if you tried to trade it, you would end up with something completely different.
A bitcoin remains fungible but, traded for another bitcoin, therefore making it fungible, means you end up with the same thing.
How do NFTs Crypto work?
In essence, you will find that the Ethereum blockchain holds most NFT’s available in the marketplace.
Why not bitcoin or dogecoin? They’re both cryptocurrencies too, but it’s the Ethereum blockchain that supports the NFT’s.
The information that is stored on them sees that they work differently from coins.
Are NFT’s worth buying?
A large marketplace has already developed in NFTs, particularly in the realm of digital art. Think of it as an art revolution for the digital age.
Anything digital can be sold as an NFT, be that a drawing or picture, signature, music and more.
Twitter’s founder, Jack Dorsey, even had the audacity to sell his original tweet as an NFT for just below $3m.
Will this really become like NFT collecting art?
The Louvre owns the Mona Lisa. Many copies/fakes/prints have been made, but it’s the museum that has the original.
Think of NFT’s in the same terms. A digital file can be copied yes, but only one owner can be in possession of the original.
It would be difficult to transfer the copyright of an NFT from the original artist, but there’s nothing to stop a negotiation into the same.
Of course, the Mona Lisa is a physical object whereas an NFT ‘lives’ in the digital world only. The thrill for the owner is to know that they have the only original in existence, and that’s the same in both the real and digital environments.
Is there a point to NFTs?
The simple answer is absolutely. Collectors will hope to hoover up NFTs at reasonable initial value in the hope that, eventually, they can make a profit if they sell it.
If you buy an NFT, what you then do with it is completely up to you. Having it as your online digital presence would be one way of making daily use of it, and which would in some way render the purchase more than worthwhile.
The fact of just owning it should be more than enough for most, however. If you know, you know, as the saying goes.
As an artist, it’s another way of guaranteeing another revenue stream, and with the blockchain allowing the artist to retain a small percentage of future sales, there’s no telling how much money can be made over time.
Is every NFT Crypto unique?
The blockchain has a unique token for each NFT.
The original will always remain just that, as in the example above. There’s nothing to stop digitally numbered copies being made, and then used in a sense like trading cards would be, however, none will be the original, unique, token and are therefore totally worthless.
That won’t stop some trying to cash in on the boom of course. At this stage, no one really knows in which direction things are heading, suffice to say that everyone wants to jump on board at the outset for fear of being late to the party, hence the demand exceeding supply at present.
Can I buy this article as an NFT?
Technically, virtually everything that is digital is able to be sold as an NFT, though it would be difficult to do so with an article.
Marketplaces that are popular with NFT’s include Rarible and OpenSea, where you’ll find the weird and the wonderful.
Nike are even trying to get in on the act by patenting a method of verifying the authenticity of their trainers with and NFT currently called ‘CryptoKicks,’ whilst various computer games are offering in-game sales of NFT’s as part of the gaming experience.
Can NFTs be stolen?
It would be incredibly difficult and anyone trying to do so would need to have sophisticated knowledge of how the blockchain works.
A ‘flipper’s market’ exists, but it’s not like the Rolex watches one for example.
Someone will cop a genuine Rolex from a dealer and then, because of supply outstripping demand, sell it on straightaway for a profit. (Those people are known as flippers.)
A blockchain stores a record every time a digital transaction takes place, so trying to steal it and then ‘flip’ it, would be a huge, time-consuming undertaking.
Clearly, there are people waiting for someone to do just that though.
How long will NFT digital art last?
NFT’s are stored in digital wallets. Could there be a time when file formats are unable to be opened? Conceivably, yes. Will people lose the password to their digital assets? Undoubtedly.
However, with technology becoming more and more sophisticated, there are likely to be enough ways and means to store your digital assets for many, many years hence.
Most of the marketplaces will accept the cryptocurrency Ethereum as payment, although it’s absolutely possible to pay in any currency that the seller desires.