Lately you might have heard about digital artwork selling for hundreds of thousands of dollars and more. The letters NFT seem to be floating around a lot more. But what are NFTs and why has it become so popular lately? Is this a fad? We took a look at this fairly new innovation in the digital realm.
The technical explanation…
NFT stands for Non-fungible token. Non-fungible means that something is unique and can not be exchanged or replaced. NFTs cover anything digital from art, music, etc. These came about in 2015 thanks to the popularity of cryptocurrencies and advances in blockchain technology. NFT’s live on what they called the Ethereum blockchain. Ethereum is like Bitcoin, a digital currency. A blockchain is a file that can not be copied/pasted, edited of any existing information, deleted or manipulated. However it can be updated like when a piece is sold again.
What are NFTs?
In the simplest of terms, it is a digital record that shows ownership of digital content. Think of it like buying an original piece of art that hangs on the wall. The NFT is the receipt of purchase or a certificate of authenticity. The artist retains some of the copyright and reproductions rights but basically when you buy the digital art, you own it and have bragging rights. Here’s a great example: you can buy a print of the Mona Lisa on Amazon. But the original hanging in the Louvre Museum in Paris is owned by France.
Who is it good for?
NFTs now allow auction houses like Christie’s and digital sites like SuperRare the ability to sell digital art. For artists, this is a new avenue to sell art. Not only does the artist receive a percentage of the sale of their work but if the piece ever goes back on the market, the artist receives a small percentage of each subsequent sale. Artists can make a lot of money with some NFTs selling for millions of dollars. For art buyers, purchasing a NFT supports artist and gives you bragging rights as well as some basic usage rights. You can also sell the NFT later on and maybe make a few bucks if the artist gets popular.
More than digital art…
Digital art is not only for photography and still art. Animations, music and even the NBA is in the NFT game with TopShot where you can own some of the NBA’s greatest highlights just like trading cards. An NFT is also good for keeping track of ownership. Nike is working on Cryptokicks which will allow them to keep track of their genuine pairs of shoes to ensure legitimacy of their product. Video games could use NFTs for special one-of-a-kind items to buy in game. So we will see more of NFTs in the future because it is a growing industry and more technological leaps may be coming soon.
Hopefully this clears up some of the mystery behind the big question of “What are NFTs.”
Related Topic: Don’t forget you can buy physical pieces of artwork around town like at artspace.
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