NFTs, The Cryptographic Tokens Used to Represent Rights Over Digital Collectables
What’s an NFT? Let’s start with the basics. NFTs – the latest cryptocurrency phenomenon to enter the mainstream – turn digital works of art and other collectibles into one-of-a-kind, verifiable assets.
These assets can be traded on the Ethereum blockchain, Ethereum being a cryptocurrency like bitcoin or dogecoin. It is important to note that other blockchains can create their own versions of NFTs, which some already have.
NFT stands for non-fungible token, non-fungible meaning unique and irreplaceable. Bitcoin, for example, is fungible – you’ll receive the same item in an exchange. NFTs are non-fungible – if you trade one for another NFT, you’ll receive something entirely different.
NFTs can be anything from drawings and photos to music, but, above all, they have to be digital. Each day, there’s a new NFT milestone sale, a new celebrity getting in on the craze and a flood of new NFT markets.
NFT buying has become an incredibly popular in the art world. In March, a new record price of $69m (£50m) for an NFT was hit at a sale held at Christie’s. The NFT, pictured below, was created by Mike Winkelmann, aka. the digital artist Beeple.
[Image Creds: Time Magazine]
Another famous NFT sale was made when Twitter founder Jack Dorsey promoted an NFT of the first-ever Tweet, with bids hitting $2.5m.
[Image Creds: BBC]
You might be thinking, how are these NFTs, these pieces of data, protected? How can you claim to “own” an inherently non-rivalrous property? Well, NFTs are “tokenised” to create a digital certificate or record to show ownership that can be bought and sold. People are, essentially, purchasing a digital keyfile that is linked to the collectible title in some digital space, which is why they can say: “I own this.”
Billionaire Mark Cuban said that people buying NFTs is all about scarcity, stating “the buyer knows how many will be made and has blockchain proof of ownership.”
An array of musicians, artists, professional sports players, and other celebrities are dipping their toes in the NFT ecosystem, The Weeknd and Kate Moss being two of the latest to do so. Kate Moss collaborated with @MITNFT, an anonymous collective, on three pieces of digital artwork. The Weeknd recently auctioned off a collection of artwork and unreleased music available exclusively on Nifty Gateway: an NFT marketplace that’s recently sold work by Calvin Harris, Steve Aoki and Grimes.
The Canadian singer, songwriter, and record producer made $2.29 million from his first collection of NFTs with the unreleased song token going for $490,000.
[Image Creds: The Weeknd]
Many are, however, sceptical about NFTs; former Christie’s auctioneer Charles Allsopp said that the concept of NFTs makes “no sense.” The question is, would you buy into NFTs? Or, alike Allsopp, are you not convinced?
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