Find out what NFT is, the intangible digital assets in non-fungible token format that are moving millions on the Internet.
The news in 2021 is quite hectic, but the sale of NFT assets has sparked a lot of interest – not just to buy them, but to understand them. Memes creators, digital artists, musicians and other classes that surf the Internet have already made millions from the sale of non-fungible tokens; know what NFT is .
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What is NFT?
NFT (Non-Fungible Tokens) is a non-fungible token technology. If we use the meaning of token as a symbol and apply the concept of fungibility (an attribute of purchased goods that can be replaced by similar ones), we can understand the NFT as a differentiated good, containing data that make them unique.
Intangibles: the sale of non-fungible token assets on the internet (Image: Cherry Laithang / Pexels)
That is, non-fungible (non-replaceable).
Different information recorded on each NFT asset makes it a different product from the others and that is why they cannot be replaced. They cannot be exchanged for equals, because there are no two equals. Basically, it’s how we see a work of art.
Thus, an NFT record basically turns anything from the digital universe (a song, a graphic art or even a tweet) into a unique, exclusive asset with secure authenticity over an immutable blockchain network, such as cryptocurrencies.
Speaking of blockchain, the use of this technology in asset registration also makes NFT tokens immutable. If we think of fungible as something that can be spent or consumed, we contrast with the non-fungible the concept of tokens that are also eternal.
What does blockchain have to do with it?
Blockchain technology is best known as a synonym for financial services, but you may be surprised to discover that this almost entirely fintech universe has also paved the way for a new token art industry as well.
Blockchain is the future of secure transactions (Image: Pascal Bernardon / Unsplash)
We already talked about blockchain here on Tecnoblog, technology took its first steps along with cryptocurrency, a peer-to-peer electronic financial system, bitcoin . It was created to, among other things, prevent the double expenditure of real values.
In a digital environment, data can be copied, changed and exchanged. Blockchain was the solution to eliminate the first two characteristics. A person cannot spend 1 BTC twice or say that he sent 10 BTC but transfer only 0.01 BTC.
But, who checks it out?
Well, blockchain technology can be explained as a public book (an accounting book) that records currency transactions. Since the blockchain is a network that works with blocks that always carry a fingerprint, the next block will also contain the fingerprint of the previous one, plus its own content and, with these two pieces of information, generate your own fingerprint; conferable by all.
The application of NFT in art takes the use of blockchain far beyond normal, for digital currencies. The list of possible uses of technology is practically endless.
Cryptokitties
NFT was not born yesterday and already has some past. In December 2017, the animated kittens Cryptokitties of Canadian company Dapper Labs debuted as tradable collectibles, functioning basically as Pokémon cards of the Bitcoin Era.
Each image was associated with a unique sequence of digits that could be traded on the Ethereum blockchain platform as a title deed – granting the owner the objective right to own a particular kitten.
Cryptokitties was not exactly a fever, but it did go viral among cryptocurrencies and the kitten-related transactions were responsible for more or less stirring up Ethereum’s transactions. Since then, more items have won tokens.
Art and token
Digital artists – or those who digitize their creations – historically face difficulties when it comes to protecting copyright online. Using non-fungible tokens in partnership with smart contracts, which allows you to include detailed attributes such as owner identity, metadata and secure link, is easier.
Let’s face it, it seems unbelievable: paying for the symbolic property of digital content hosted somewhere on the internet goes against the well-known modus operandi in which you download absolutely everything with one click, at zero cost.
NFT evangelists believe that technology can solve just that problem: the near impossibility of monetizing digital works of art, assigning a value to digital art, which until then had not been recognized in online auctions.
Digital Art (Image: Ivan Samkov / Pexels)
Who sells NFTs?
We also mention some cases that have become emblematic about the unrest around TNFs. American youtuber Logan Paul created an art of himself holding Pokémon cards and tokenized. Buyers determined that a stock of three thousand units cost 1 ether (ETH) each; earned more than $ 5 million.
The singer Grimes created a set of digital works of art that were auctioned and, among some of the unique pieces with non-fungible token and others with thousands of copies available, the Canadian artist sold about US $ 6 million in a single event.
The band Kings of Leon became the first band to record an album in NFT . The latest album “When You See Yourself” will be released on all traditional music streams, but will also be available as an NFT on the YellowHeart platform.
The classic meme “Deal With It” was registered as a digital asset and auctioned by the NFT Foundation. With bids on ether. the piece sold for 15 ETH , or $ 22,000.
And if that weren’t enough, Jack Dorsey, co-founder and CEO of Twitter, tokenized a tweet. The executive’s first post is being auctioned off with an offer of up to $ 2.5 million.
There seems to be no limit to what – even intangible – can be sold in NFT.
Who buys NFTs?
It is evident that anyone can see photos of expensive works on the internet; but it is ownership over them that creates value. With NFTs, you not only have ownership, with blockchain technology you have ownership in a public and transparent way.
Crowded Louvre Museum (Image: Jill Evans / Pexels)
From speculators who buy the first NFT assets in the hope of valuing, to large cryptocurrency owners who want to “sponsor digital art”, there are all kinds of people interested. And if digital arts were previously criticized for being simple or without appeal, the excitement may bring new names to the market.
As a vinyl collector that I am – one that values limited series, numbered and bootlegs – I remember that the fever around NFTs assets is compounded by two important ingredients: it is a new technology and it is also collectible.
As a technology that has risen in the new decade, naturally, exclusive digital assets will attract the attention of people who already travel in the medium. Another important point is the collectible nature of these assets. Collectors like me value very limited and exclusive items and this rarity arouses more emotions.
