Non-Fungible Tokens is the latest buzz phrase from the world of blockchain, with mainstream media taking an interest, particularly thanks to stories involving LeBron James Grimes and Nyan Cat. So what are NFTs?
What are Non-Fungible Tokens?
NFTs are a type of digital certificate to prove authenticity. They exist on the blockchain — the same tech that Bitcoin and other cryptocurrencies rely on — which keeps a record of all transactions.
NFTs are unique and collectible, meaning they cannot be faked or copied. They are particularly useful (and popular) in the gaming space, where virtual items can be bought and sold to keep, collect or interact with virtual worlds and games.
How are they different from other crypto tokens?
NFTs are mainly based on Ethereum ERC-721 technology but are not like Ether or Bitcoin, which are fungible — ie, ETH and BTC can be exchanged one BTC for any other. NFTs are each unique and therefore not tradable with another.
Why are NFTs getting so much attention?
The interest in NFTs has spiked in recent months as more money is being spent on them while household names are being increasingly associated with them.
According to Coindesk, more than $174m has been spent on NFTs since 2017.
Each one of those is a unique NFT with the most incredible Kings of Leon art you’ve ever seen — YellowHeart CEO Josh Katz
In February 2021, Christie’s, the 250-year-old auction house opened an auction of purely digital work by Beeple — the artist Mike Winkelmann.
Dragon the CryptoKitty was sold for 600ETH (about $960,000), a digital LeBron James card sold for $100,000 and musician Grimes this month raised $6m from a digital art sale.
In December 2020, the British Broadcasting Corporation dipped its prestigious toe into the blockchain waters with the launch of a series of Doctor Who collectable trading cards.
Why are NFTs important?
NFTs provide owners of digital assets with security and help preserve value. They are transferable, authentic and protect ownership rights, all of which are challenges for many sectors and creators in the digital age.
The popularity, attention and association with famous names that NFTs are currently receiving is another boost to the blockchain sector in general, as the wider public increasingly understand the importance and value of crypto technology.
Earlier in March 2021, Kings of Leon became the first band to release an album as an NFT.
In addition to conventional release on services like Spotify, Apple Music and Amazon, the album will be released in NFT form on YellowHeart, a blockchain-based music platform founded in 2018 Rolling Stone reported.
The new album, “When You See Yourself,” will be delivered as three different types of tokens: the first a special album package, the second offering live show perks and the third containing exclusive audiovisual art.
Albums put out as NFTs have generally been the realm of DJs like 3LAU and have seen prior releases, but the Kings of Leon is the first band to launch a new album in the blockchain-based format.
YellowHeart is also minting 18 “golden tickets” that unlock actual front-row concert tickets at every Kings of Leon tour for life as part of the NFT release.
The band will auction six of these, with the remaining 12 to be vaulted, much like rare pieces of art.
“Each one of those is a unique NFT with the most incredible Kings of Leon art you’ve ever seen,” YellowHeart CEO Josh Katz said in an interview.