NFTs. I’m sure you will hear more than three letters in recent times. A year ago, most of us would never have heard the acronym, never mind what it stands for. It stands for Non-fungible Token. Now that probably has not made its meaning transparent, so let’s elaborate.

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Non-fungible Tokens (NFTs)

NFTs. I’m sure you will hear more than three letters in recent times. A year ago, most of us would never have heard the acronym, never mind what it stands for. It stands for Non-fungible Token. Now that probably has not made its meaning transparent, so let’s elaborate. 

What are NFTs

Non-fungible means unique; something cannot be replaced by something else. Most cryptocurrencies are fungible because you can trade one for another – trade a bitcoin for another bitcoin, and you have precisely the same thing. That is not the case with NFTs. To visualise this, think of a one-of-a-kind piece of art – it can’t be created again. That is how we would define non-fungible. Now we understand the first element of the name, we must explore just what a token means. There is no limit to what can be included in these tokens. Drawings, music, and other forms of digital art fall under this category. Comparing it with exclusive art makes sense. 

Ownership 

You are owning an NFT grants the possessor a few fundamental rights, primarily surrounding its usage. These include posting the image online or using it as your profile picture. And, of course, you support an artist when you buy it.

How much do they cost? 

A cartoon-like image known as “Gucci ghost” sold for $3,600, and a digital artist known as Beeple sold an NFT of one of his works for $69 million. That would be utterly inconceivable. 

Why do people want NFTs?

Unlike a traditional painting, an NFT has no physical ownership. A copy is quite as good as the original, so when one buys an NFT, it only allows them to claim ownership; any other person can view the same image in the same quality for free.

Those who class themselves as collectors of the NFT can make money from it. They have the potential to function in the same way as any other speculative asset in that the value may go up, and you can sell them for a profit. That could suggest that the world is moving away from the traditional art market and that art connoisseurs will build a portfolio of NFTs approaching the future.

That is highlighted by an 18-year-old who has curated an NFT empire worth over $17 million. While most have not found the same level of success, it proves the fact that these unconventional pursuits have the potential to set you up for life. 

How do you go about creating an NFT? 

Creating an NFT is as simple as having a digital wallet, purchasing Ethereum – an open source, decentralised blockchain with innovative contract capabilities, essentially a cryptocurrency – and connecting to an NFT marketplace where the content you create can be uploaded and converted. It is doubtful that this process will immediately lead you to the riches some have found in this game, but it will certainly let you make a start as a digital artist if you wish to take yourself down that path. 

The NFTs are bought with Ethereum and then sold for traditional currency. That demonstrates that the market is very accessible, and one does not need considerable funds to embark on a venture creating, buying, or selling NFTs. 

Early days 

It is still the early days for the NFT despite its sudden popularity and the vast sums of money being invested in the market. Some people see it as a ridiculous fad that will fizzle out after the world becomes bored; others see it as the future. 

With the ever-evolving digitisation of the world, digital wallets are increasing in prominence, and subsequently, we could witness a migration towards using these. If this were to be the case, NFTs would add the potential of being used as security tokens and the resulting tokenisation of both digital and real-world assets. Further applications could include software licencing, qualifications, and birth and death certificates. The function of the NFT provides the facility to trace the ownership indisputably and could be saved in a digital wallet which one day may contain proof of every asset we own. Fundamentally, we are still in the early days, but the recent craze surrounding NFTs has proven the extent of their potential. In some ways, they could be the answer to proof of ownership of assets in numerous fields. Overall, it is evident that they won’t be a fad. NFTs have the potential to make a profound impact on aspects of our world. 

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Non-fungible Tokens (NFTs)

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