NFT: What Is That & Why Is Everyone Obsessed?
What Are NFT’s?
NFT (Non-Fungible Token)
A unit of data stored on a digital ledger (blockchain) that certifies a digital asset and provides proof of authenticity.
NFT’s represent many forms of digital assets from photos and videos to audio, animations, GIFs, interactive art or anything digital. Many music artists are creating NFT’s from their song lyrics. Even Jack Dorsey, the CEO of Twitter, has created NFT’s from his first tweets on the platform. They can be anything that has a digital code or blockchain which cannot be interchangible. This means that NFT’s cannot be faked or duplicated. Theft of a digital asset is completely extinguished due to the origin of NFT’s being a form of cryptocurrency (like Bitcoin, you may have heard of it).
Cryptocurrency
A digital asset where transactions are verified and records maintained by a centralized system called a ledger; a means of asset exchange.
The blockchain code that identifies an NFT is based from the Ethereum (ETH) blockchain with detailed information about the asset added to the end of the blockchain code. Ethereum is a decentralized digital currency that has a line of code to track it’s origin. Like cryptocurriences, NFT’s are sold in a digital market. When an NFT is created (like crypto), it is given a chain of code that cannot be altered which gives them their none-fungible name.
Each time an NFT is traded (sold), that transaction is recorded and added into the blockchain code of that NFT. They can always be traced back to the original creator through the blockchain. This means that each NFT is completely unique, no two are the same. This also means that those who purchase them get their identity added into the blockchain code. This brings new meaning to personalization of an asset.
What’s the Obsession?
The simple reason everyone is buying into NFT’s is scarcity. It’s a new market (created in 2020) and everyone wants in on a potential rising form of cryptocurrency (similar to those who have to have the latest and greatest from Apple). Many interested persons also realize that due to the creation of blockchain code, the content of an NFT cannot be duplicated but it can be authenticated very easily.
The authentication lies within the blockchain code of the NFT upon its creation; Authenticity is key. This is a fool-proof way of showing who owns the piece, who created it and where it has been purchased and sold. All the information lies within the code. This is like having a digital version of an authenticity card if one were to purchase an expensive bag (like Chanel) or watch (like Rolex).
Creators and artists realize they can sell to a global market with unlimited reach in the digital space. When someone purchases an NFT, they own a token on the blockchain of that asset (similar to buying into a raffle). The buyers’ name is then connected to the work and the creator through this digital code. This gives a more unique purchase connection between the creator/artist and the buyer/collector. Both parties’ crypto addresses are now linked to the asset within its code.
It is an exchange of value that guarantees authenticity. There’s nothing more frustrating than buying a piece of artwork, only to find out that it’s not real. An NFT removes this negative experience completely by providing authenticity from the very beginning within the blockchain code. NFT’s hold value like physical art and, like physical art, there can be mulitples (similar to giclees). These multiples have their own unique blockchain code and they do hold some value however, the original NFT holds the most value.
NFT’s are a rapidly growing market of new digital art and assets that have integrated authenticity; making them desirable and valuable. NFT’s give the creator and buyer a unique experience that is recorded and can be traced to the origin of the work. This may be the start of a completely new fandom for artists, creators and collectors.