NFT's are the newest buzz in the crypto world and it's time to get familiar with them! Here is everything you need to know to jump on the latest trend!
Author: Derek LaChance Editor: Marina Kaleb
In a world where everything is going digital, from the task of ordering food to having virtual wallets filled with cryptocurrency, the most recent buzz is around NFT’s.
While NFT’s have existed since 2014, it's only recently they jumped into popularity. This relatively new addition to cyberspace has been breaking headlines in the real world. With some of these tokens auctioning for millions of dollars, you must be wondering what they actually are!
Non-fungible tokens
In simple words NFT’s are non-fungible tokens. Certainly there are some mixed opinions on the subject, there is no question about the potential applications this technology will bring.
Gold and cryptocurrencies are considered fungible, they can be traded or exchanged, one for another. Here is an example, one Bitcoin is always equal to another Bitcoin and an ounce of gold may be exchanged for another ounce.
On the other hand, diamonds are non fungible tokens. A single diamond has unique features like the cut, color and size that make it unique. Hence, an ounce of diamonds is not worth the same as another ounce of diamonds.
Non-fungible tokens (NFT’s) are each unique and irreplaceable making it impossible for one NFT to be equal to another. There are many different types of non-fungible tokens and they can be pretty much anything digital, from an art piece to a contract.
NFT's are unique and can't be destroyed
NFT’s are cryptographic assets that can’t be destroyed, lost or counterfeited, as they exist on the blockchain! In addition, digital items can be authenticated much easier than physical ones. Think about a famous painting like the Mona Lisa. There are many copies of this piece of art but only one true original, that makes it valuable and irreplaceable. Now imagine seeing 100 Mona Lisa’s side by side and being able to identify the original copy almost instantly! Every NFT contains a unique digital identifier that distinguishes it from others and companies are already exploring unique ways to employ this technology in their businesses.
The process
The process of creating an NFT is called minting. Artists, musicians, companies, and well anybody may create one. Once created they may place it on the digital market of their choice. The NFT is given a unique fingerprint, name and symbol. Just like cryptocurrency, the record of transactions will be permanent history, creating a verifiable and exclusive ownership for each token.
The technology around NFT’s may be applied to everything from concert tickets to covid passports and even voting, although those applications are for when this technology advances - but that may be in the near future! Right now, the majority of the current market is centered around the realm of art and collectibles. Digital artwork by renowned artists, tokenized moments in sport, and even an NFT of the first ever tweet in history!
Why are NFT’s so expensive?
For instance, famous digital artist Mike Winklemann, better known as Beeple, crafted one of the most famous NFT’s to date, “EVERYDAYS: The First 5000 Days”. This piece sold at Christie’s auction house for a record-breaking $69.3 million. Anyone can view the individual image and even the entire collage of images online for free so why are people willing to spend millions on something they could easily screenshot or download?
An NFT allows the buyer to own the digital item. Not only that, it contains built-in authentication, which serves as proof of ownership! Collectors value those “digital bragging rights” almost as much as the item itself. I mean anyone can have a copy of the Mona Lisa on their wall, but some people would flock at the opportunity to buy the original! Ultimately, owning the real thing is as valuable as the market makes it.
NFT's can be affordable too!
This doesn't mean that all art forms of NFT’s are jaw droppingly expensive. Artists are able to post their creations for any value they would like and just like art in the real world, the perception of worth is in the eye of the beholder. What is incredible about this medium for selling is that artists access a greater source of direct buyers. Content creators are able to see their profits when normally, earning potentials are swallowed by platforms and only exposed to a small market. On top of that the original artist will always be recognized as the creator's address is always a part of the tokens data!
The world of non-fungible tokens is relatively new but, in theory, NFT’s can be potentially used for anything that is unique and needs provable ownership. It may all start with expressing yourself creatively by owning digital artwork but one day you might prove that you own your car, maybe even your house, with an NFT. Who knows, eventually your academic documents may be given to you in the form of an NFT! These tokens provide indisputable proof of ownership that is more secure than any paper contract.
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Author: Derek LaChance Editor: Marina Kaleb In a world where everything is going digital, from the task of ordering food to having virtual wallets filled with cryptocurrency, the most recent buzz is around NFT’s. While NFT’s have existed since 2014, it's only recently they jumped into popularity. This relatively new addition to cyberspace has been […]
