What is an NFT?
For those of you that haven’t quite wrapped your heads around crypto assets, or maybe you have, and now you’re curious about NFT’s.
I will explain what an NFT is, how to make them, where to purchase them, what to do with them once you have them, and finally, why you might want one.
What is an NFT?
NFT stands for Non-Fungible Token. A fungible token, on the other hand, would be something like a $100 bill. If I gave you a $100 bill and you gave me two $50 bills, we would both be happy because both of us maintained our initial worth.
The bills are interchangeable, meaning they can be interchanged with other bills and retain their worth.
Non-fungible tokens are like unique bills. You cannot trade them for any other bill, and retain the same worth.
Imagine the Mona Lisa painting, if I owned it, I couldn’t trade it for another Mona Lisa painting, because there is only one. If I decided to trade it for something else, like an Andy Warhol painting, I would lose value, because the Mona Lisa is more valuable than the Andy Warhol painting.
How to make an NFT?
Once an artist is ready to publish their art they will mint their artwork using one of various programs (Mintable, Rarable, Createbase etc…)
While minting , all sorts of meta-data, including a timestamp, is imbedded. This will show the exact time the art was first published. The minting process also includes adding a “digital signature” which is basically the artist’s unique crypto wallet address. Now the art work has both, the artist’s digital signature, and a timestamp. These prove the art is an original, directly from the artist, and that they were the first person to publish the artwork.
If two people were to mint the same piece of art, it is the timestamp that would indicate who was the original artist.
Within the meta-data imbedded in the token, code can be written to set parameters for the behavior of the token. For instance, an artist can create a parameter that indicates that 10% of the sale price of the intellectual property will be delivered to the artist, in perpetuity. This would allow artist to be paid every time the artist sold, without the need of any middleman like a record label or an auction house.
How to own an NFT?
If you’d like to own a piece of digital artwork, and guarantee that no one else owns it, you want to ensure that it is an NFT. If you decide to display this artwork in a public place, online or as a print, anyone can potentially copy it. It’s the NFT that works as a certificate of authenticity.
Anyone can purchase an NFT online by visiting one of many websites,(Opensea, Society 6, Caseable), connecting your digital wallet, and exchanging your crypto assets for the artwork that catches your eye.
What to do with it?
Now that you have your very own NFT, you can choose to use it in various ways. For starters you can make a wallpaper for your laptop. Maybe you’re a gallery owner and you want to display it for potential buyers. You can print the artwork and display it, use a high definition monitor, or use a projector to display the art.
Some other options are more technically sophisticated but hold real promise for the future.
Using a virtual world like (Decentraland.org or Cryptovoxels), you can create a virtual gallery. Allowing art lovers from around the world to explore a 100% curated experience. Everything in this virtual gallery can be created and curated to your liking, from the display of the art, to the ambience of the gallery, from the location of the gallery, to the presence, or lack there of, of other gallery visitors. Only our imaginations can limit the virtual world's capabilities.
Tip of the iceberg
Non-fungible tokens basically allow us to verify and transfer ownership in a secure and trust-less way. Buying and selling art is just the tip of the iceberg. This technology can be used in; real estate, supply chain logistics, for legal documents such as a marriage license, airline tickets, royalty payments, and even to execute a person’s last will and testament.
Non-fungible tokens can satisfy the collector within all of us, and allow our business oriented mind to take advantage of opportunities in the digital world. For example, Jack Dorsey sold the first “tweet” ever for 2.9 million, and the buyer knows they have a piece of history in their wallet.
We can loan an artwork to a renowned museum, or create a social standing through the “proof of purchase” created by the token.
NFT’s have the potential to change everything. How they will change the world will only be limited by our imagination, and our will power.
