Believe the Hype. Non-Fungible Tokens and Why You Should Care
The internet has recently blown up about Non-Fungible Tokens or NFTs. Many are quickly racing to learn about what they are and why they are fetching such high valuations. Let’s dive in and learn about NFTs and why you should care.
What is an NFT and why are they special?
An NFT is a unique token that can be created (or minted) on a blockchain. There will be nothing exactly like it ever. NFT creation happens by something called a smart contract. Smart contracts allow actions to occur according to a set of rules written in code and the result of these actions are recorded and auditable on a blockchain. Think of an NFT as you would think of yourself. You’ve got a unique fingerprint that makes you, YOU. There may be other things that have similarities to you, but you’re completely original. The same can be said for NFTs!
It’s difficult to know and establish the rarity of a particular product or item. Organizations and creators can make such claims, while unbeknown to customers secretly continue to manufacture and mass produce the in-demand goods. Counterfeits will also be created. With NFTs, however, the creation of a unique digital asset is publicly recorded and time-stamped on a blockchain. If someone attempts to create a counterfeit item, it will be easily spotted as a fake since such an item would neither originate from the same creator nor have been minted at the original time of creation. This solves many of the issues plaguing the collectibles space and allows for true rarity and ownership of the items you purchase. In short, NFTs minted on a blockchain not only assure the authenticity and uniqueness of a particular item but also confirm the product’s ownership status.
What does an NFT do?
The current NFT craze is primarily centered around unique digital art, memorabilia, and collectibles. Many artists and creators are minting NFTs and then selling or auctioning these digital files to buyers, some of whom have resold the assets for significant premiums in secondary marketplaces. NFTs typically range from a simple digital jpg, video format, to interactive, immersive digital environments, i.e. virtual and augmented realities.
Beyond being a new type of digital art or collectible, NFTs are rapidly establishing themselves as an emerging asset class with investors beginning to include NFTs within their overall investment portfolios.
NFT bubble?
As a digital image or media format viewable on a mobile phone or computer device, many are quick to dismiss NFTs as a fad and are skeptical of its recent lofty valuations. The value is impacted not only by the identity of the artist and the rarity (supply, demand) of the item but, similar to the traditional art world, is also based on the “eye of the beholder”. Time will tell whether Beeple’s “Everydays: The First 5000 Days, 2021” NFT was worth the astounding $69 million sale price achieved at a recent Christie’s auction. Looking ahead, expect to see more use cases for NFTs across a variety of industries and sectors. From logistics, marketing, healthcare, finance, entertainment, to sustainability and conservation, enterprises will increasingly seek to leverage NFTs as a unique application and tool for efficiencies and tackling common business issues and challenges related to intellectual property, ownership, and authenticity.
Why create NFTs on the GoChain blockchain?
NFTs are opening up new possibilities for artists and enterprises to reach new audiences and monetization opportunities. However, the dramatic rise and adoption of NFTs are also (rightfully) raising considerable concerns about the carbon footprint and environmental impact of NFTs, depending on the particular blockchain network used, given the costly and significant CO2 emissions of the large networks of computers working required to process the NFTs. Selecting the proper blockchain matters. GoChain is the perfect partner to help get you started and to sustainably mint and deploy your NFTs. As one of the most scalable and greenest blockchain protocols in the world, you’ll be assured to know that your NFTs are being minted in a sustainable way and validated by some of the most respected, high impact organizations globally. For developers interested in the NFT space, learn how to quickly create and deploy an NFT smart contract on the GoChain blockchain in 10 minutes!
Ready to start your journey with NFTs? Contact us for more information!
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