Featured Image Credit: Mandriod_o
“There is nothing stronger in the world than a good story, and there nothing better to lead us into the future than a wonderful story”. Art has always been part of man’s culture, co-existing with his reality. Collectors and archives alike have always guided the narrative of our story throughout all ages.”
What started as an experiment on platforms like Cryptokitties and Cryptodoggies in 2017 is now a new world crypto order. The world is still adjusting to the highs and lows of cryptocurrency, despite the expert warning that this form of money may not possess the standard money properties like measuring or storing value. One thing for sure, not all reality pass through the norms. Nowadays, the non-believers have been converted to active investors and traders in the crypto world, while others are still counting their losses due to their nonconformity. The dust of knowledge was yet to settle on cryptocurrency economics when a new art popped up; an elite trend known as the Non-fungible token (NFT). The NFT is a variety of things that could be bought or sold online backed by digital assets and sometimes tangible assets. Now, if you don’t like the sound of that, wait to hear what it means:
What is NFT? How Does it Work?
NFT is a digital token built on the digital technology known as the blockchain. While the word blockchain might sound familiar, Non-fungible token might not. Fungible assets are assets like money or any other unit of a commodity that can be interchanged with other assets. The bitcoin is fungible because you exchange it for the dollar or other fiat currencies. Non-fungible assets are the reverse; these assets are uniquely designed in volume or pieces depending on the unit.
Take a limited version of Lamborghini on the market, for example. Imagine that this limited Lamborghini version is stored as data on a system that harnesses decentralised information. In that case, it becomes a non-fungible token. Most NFTs are built on the Ethereum blockchain that uses ether as its source code. An NFT can also be seen as an autographed gift card or an item whose original copy is easily recognisable and traceable. Exclusive ownership rights are given to whoever possesses it depending on the creator’s initial contract.
Also, the creator can sell it as a token that cannot be altered at any time. A pirated NFT can be sold on the market. However, with blockchain technology, the specific signature given to the original makes it easily discernable from the copied version.
What’s the big Deal with this New Crypto Terminology?
The increase in the sale of virtual arts and other commodities like in-game products, virtual animals and places, is growing. This growth has its effects on the NFT, making it expand by trends. We recently saw Jack Dorsey, co-founder of Twitter, put up his first tweet as an NFT. If Jack can sell his first tweet, so also can a gif, video or animated characters be sold. The bubble in this market is primarily due to the value created on any item put up as an NFT. With lockdown measures still putting us in check, we have exploited different realities to augment what used to be conventional. It’s not as if the days of “going once, twice, sold!” are behind us. Items are still sold to the highest bidder. The big money spender with nothing to lose can afford to bid for an item they treasure or have memories attached to. Sometimes, they buy with the hope of a future increment in value to resell later at a higher price level.
The traction of the attention the NFT is pulling on the market space is not a “fantasy” built from the idea of a Metaverse from science fiction but an alignment of three primary interests:
- A platform for collectors of art to connect directly to creators.
- The creators themselves can solely decide the tokens to be created and earn all the profit.
- The NFT is a medium to sell anything you feel holds value (even virtual socks have value as collectibles).
How Can I Create an NFT?
The creator can then put up items for sale in an acceptable format. Once this is done, a gas fee (depending on the market) is attached to the minted token. Simple right? However, the NFT space is still a risky market, considering anybody can make a pseudonym to experiment with things for sale. Thankfully, the rise in fake experimentations is mitigated by the fact that people only trust what they believe is valuable. Top artists like Beeple have been the top gainer on the NFT marketplace. Other celebrities and organisations have not been left out of the NFT craze, as they’ve been buying or selling NFTs.
Anyone with a bit of investment should be mindful of the fees each minting attracts, as it can sum up to hundreds of dollars. In a bid to create many NFTs, one may end up penny-wise and pound-foolish. One is therefore required to be careful when buying or selling NFTs, as with any other crypto.