NFTs Made Simple
NFTs are having their moment as we speak and are currently becoming the next big thing in cryptocurrency.
If you've been on social media in the past month, chances are you've come across various posts and tweets on NFTs, but what exactly are they?
We're here to break it down for you.
NFTs stand for Non-Fungible Tokens. NFTs are unique. They can be replicated but can't be owned by everyone except a particular individual. Think of it as a fine art collection. NFTs could be anything, they could be furniture, computers, window sills, etc. - anything that holds value and has unique properties.
NFTs tokenize things like art, collectibles, and even real estate. They can only have one official owner at a time and they're secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.
Why are NFTs big in the art industry right now?
Digital art for the longest time has been underappreciated, primarily because it is easily available on the internet. NFT is changing that, it's helping creators maximize their earnings without having to turn to an intermediary (ads) to earn a meager lump sum.
NFTs are creating a new economy where creators don't hand ownership of their work to the platforms they promote it on.
If and when the creators would like to sell their content, all the finances are collected by them. If the new owner then decides to sell it further, the original creator will get royalties through the selling process.
A question that arises in everyone's mind is if digital art is so freely available, why would anyone pay for it?
Think of Leonardo Da Vinci. One can simply go on google and search for Mona Lisa if one would like to look at it. But looking at it is very different from owning it. Looking at it won't make you rich, owning it will.
The same works for digital art. The more a particular piece of art is screen-grabbed and talked about, the more value it has in the market., the more it'll sell for.
NFTs aren't just limited to digital art; it refers to any digital content, gaming items, domain names, physical items, investments, and collaterals.
Beeple Everydays: The First 5000 Days. Sold for: $69.3 million
Beeple, The First Emoji. Part of the $69.3 million Everyday
Cryptokitties (game) sold for $170,000
Dogecoin isn’t an NFT, but this image is.
Rainbow Cat sold for $690,000 (Image credit: Nyan Cat)