Netizens all over the world are going crazy about people selling different things as digital assets for insane considerations, these days. Yes, we are referring to the increasing popularity of NFTs here. From Christie’s collaged graphic art piece being bought for millions to A R Rahman selling source tracks of Rockstar’s songs, it has been the talk of the town. But still, there are some doubts lingering as to the all-about of NFT? Here are answers to some of your queries relating to NFTs and their working.
What is NFT?
Non-Fungible Token is commonly shortened as NFT. To reduce its complexity, let us first understand what are fungible tokens. Hey, buddy, do you mind giving me your bill and you take mine. I like yours better. Well simply wherever you can do such an exchange, fungibility exists. In other words, fungible tokens are those which can be replaced by something similar, holding the same value as itself.
Quite apparently, Non-Fungible Tokens are its opposite. Those which cannot be replaced or exchanged for something similar are NFTs. This is because each such token holds a different value and is unique in itself. Therefore, they can never be substituted with anything similar.
Ownership of NFT Art
But wait, that meme is all over the web, how can one single person own it? Consider NFTs the sign of originality. If you possess an NFT, it is only you in the world who has the original copy of that and all others use the duplicated version of what you have.
A notable point here is that NFTs are exchangeable, being virtual assets. However, they cannot be substituted as they are one-of-a-kind assets. Stating differently, such tokens are replaceable with others but not anything the same because a thing the same as it is doesn’t exist.
NFTs and Cryptocurrency
NFTs are virtual assets that are stored in the blockchain, like cryptocurrency. Their transactions are recorded in the virtual ledger to maintain their authenticity. Though, cryptocurrencies are different from NFTs as they are fungible assets. For instance, a Dogecoin owner can replace his Dogecoin with other Dogecoin or something else of the same value, which an NFT owner cannot do with his asset.
Rising Demand for NFTs
NFTs are booming up these days like anything. Everyone over the internet is looking for opportunities to enter and trade in this incredible world of digital assets. People are recognizing NFTs more and more, increasing their demand. There is an emerging prospect for various artists and content creators to sell their pieces as NFTs. It could be beneficial for them, both as recognition as well as monetarily. ( NFT marketplace, fungible tokens, non fungible tokens )
What can be an NFT?
The blooming chance of NFTs is a door for even more advancements in this digital era. One can create an NFT for many things, provided they are unique and of some value. This article is so cool. I wanna own it. Yes, you can buy even this article as an NFT, if we get a good price from this deal, though. Practically, everything that you own, tangible or intangible, could be traded as a non-fungible token. Although, as of now, this concept is more prevalent digitally than in the physical world.
Top 5 NFTs Sold in 2021
The trading of assets as Non-Fungible Tokens is comparatively a lesser-known phenomenon. However, the year 2021 has brought a dynamic change in the scenario. Following is the list of the top 5 NFTs that are sold this year.
- Everydays: The First 5000 Days for $69.3 million.
- Human One for $28.9 million.
- Cryptopunk #7523 for $11.75 million.
- Cryptopunk #3100 for $7.67 million.
- Cryptopunk #7804 for $7.57 million.
Another interesting feature of NFT is that such tokens are easily divisible. Imagine you have this ancestral property which now you need to divide among your seven children. It will be a really typical task to perform, owing to your property is a physical asset. Now, consider this property being converted into digital real estate. The overwhelmingly typical task becomes easier at once. Similarly, other virtual assets like some digital art pieces could have multiple owners. ( NFT marketplace, fungible tokens, non fungible tokens )
Copyright vs NFT
A lot of people confuse ownership of NFTs with copyright over that asset. The two things are not the same. Owning copyright implies complete authority over something. That thing could only be used by people with your permission. Contradicting to this, virtual assets are used all the time, by millions of people on the internet, which has an NFT owner. The ownership of a non-fungible asset is merely proof of possessing the original asset, and not its copy.
Being a novel concept, NFT has attracted a lot of criticism as well. Though the NFT transactions are recorded in the blockchain, there is nobody authorizing or validating these transactions. Due to this, it loses the faith of investors, often. Moreover, the lack of regulation leads to fraud and scams. Also, there is an issue of a rising carbon footprint due to NFTs being energy-intensive. Such concerns are challenged with the evolving presence of NFTs in the digital world.
The Way Forward
The introduction of Cryptos has started a domino chain in the virtual world. It was just the first step towards a more digitalized and integrated global economy. NFTs have further increased their scope in terms of information and technology. It is the time for owners and investors to make a fortune in life. There is a lot to discover and innovate in this field. Knowing this, we are off to explore the digital world, available right at our fingertips.
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