Let’s talk about NFT’s
NFTs. It’s a term you may have previously never heard of, yet more and more people are talking about it. So, what is it?
The use of the word NFT (non-fungible token) has risen by more than 11,000% in 2021, it was even named the word of the year by Collins dictionary. An NFT is a “one-of-a-kind” asset in the digital world that can be bought and sold like any other piece of property, but potentially has no physical form of its own. This could be but is not limited to, digital artwork, images, virtual fashion, and more.
To explain the concept in an easier way, imagine you take a picture of the Mona Lisa painting. You can take a picture of the original artwork or even buy a print copy of the painting. Despite having this photo or print copy, you do not own the rights to the original painting. In essence, by owning an NFT you own the rights to the original Mona Lisa painting that we are using in this analogy.
NFTs are digital tokens that provide a certificate of ownership for a digital asset which lets everyone else know that you are the owner. Owners of NFTs can add custom code to each NFT asset to limit what you can and can’t do with them. For example, some NFTs have embedded code into them that blocks anyone else other than the owner from screenshotting your NFT.
At this year’s MTV Video Music Awards, celebrities appeared as projections of Bored Ape NFTs in a virtual performance, one of the most sought after and highest value collections of NFTs.
So how do NFTs work?
NFTs rely on two types of technology, blockchain and cryptocurrency. To buy NFTs you need to own cryptocurrency. Depending on what platform you intend to purchase an NFT, depends on what type of cryptocurrency you need to have as there is no market standard. When you purchase an NFT, it is added to the blockchain, therefore becoming your property. A ‘smart contract’ is formed which is a piece of data that shows ownership along with some other key pieces of information that relate to a particular NFT.
Where can you purchase NFTs from?
According to the BBC, the best platform is “OpenSea”, this is where the most amount of NFTs have been uploaded and purchased. There is however an extensive list of companies from which you can purchase NFTs.
The value of NFTs
Anyone can create an NTF by tokenizing their work, however, each individual NTF is worth a different value. The value of an NFT is subjective as NFTs could be more valuable to one person than another. One of the reasons they have become so popular is due to the multi-million sale value they can potentially generate. An example of this is the French firm Sorare, which sells football trading cards in the form of NFTs, generating a whopping £498 million. Not all NFTs are valuable in terms of monetary value, for some, it’s more about a personal value in owning them.
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