What is an NFT (Non-Fungible Token) and Why They Can Be Used for More Than Digital Art
Introduction
Lots of discussions are making the rounds on the internet regarding what NFTs are. People are literarily going crazy to sell or own NFTs. Amidst all these are those who know little or nothing about NFTs. So, what exactly is the point of this article? Simple. This article sets out to address what NFTs are. It will also discuss why NFTs are used for more than digital art.
What is an NFT?
The internet went wild in March 2021 when Jack Dorsey, the Founder of Twitter sold the first-ever tweet for $2.9m. The tweet which was sold as a Non-Fungible Token (NFT), was bought by a Malaysian-based buyer, Sina Estavi, who equated the purchase to buying a Mona Lisa painting.
Also, in March 2021, Everydays: The First 5000 Days, a Digital artwork of Mike Winkelmann, professionally known as Beeple, was sold as an NFT for a whopping sum of $69million. These scenarios would tempt anyone to ask what an NFT is all about. So, what is an NFT?
NFT is an abbreviated word that means Non-Fungible Token. It is simply a unique digital asset like photos, videos, digital arts, and more. NFTs can be bought and sold online, as in the examples cited in the paragraphs above.
When you consider physical money or cryptocurrencies, they can easily be traded or exchanged for one another (which means they are fungible). This is because they are equal in value. However, NFT is said to be non-fungible because it is not exchangeable. NFTs are different, there is a unique digital signature that makes it impossible for one NFT to be exchanged with another, or made equal to another.
NFTs offer exclusive ownership rights. By implication, it means that they can only be owned by one person, at a time. The unique non-interchangeable data which is attached to NFT ownership is stored on a digital ledger that uses blockchain technology to ascertain proof of ownership. This does not mean that other people will not have access to the NFT item sold, it only means that the original item belongs to the unique buyer. Also, a single NFT can be represented by a series of NFTs that look alike but that each are still represented by a single digital signature. Think about a print series of a famous painting. To simply put, what a lot of NFT collectors value when buying an NFT is the digital bragging rights.
Why Can NFTs Be Used For More Than Digital Arts?
The NFT frenzy making rounds in the digital world will probably be around for a long time. While digital artists are leveraging on NFTs to sell their creative works, it is important to note that NFTs are not only limited to digital arts. NFTs can be created from digital objects like GIFs, videos and sports highlight, collectibles, design sneakers, music, tweets, and more.
Rob Gronkowski sold NFT trading cards of Super Bowl highlights for over $1.6million. The popular Rock Band, King of Leon made over $2million selling music as NFT. Jack Dorsey sold his first-ever tweet at $2.9million. The above points establish the fact that NFTs can be used for more than digital arts.
James Bowden and Edward Thomas argue that NFTs create opportunities for new business models that didn’t exist before. They believe that NFTs can give musicians the potential to provide enhanced media and special perks to their fans. NFTs could also be part of the solution in resolving issues with land ownership.
With blockchain domains, each unique bURL (uniform resource locator) can also be an NFT. It makes each address a unique place in the digital space and allows for human readable names to act in the same way as the above NFTs. You can buy, use, sell, trade and otherwise make a business around them.
Conclusion
The decentralized digital economy presents us with opportunities, some of which are not yet known. However, with the seemingly increasing conversations around NFTs, we are just getting started.
Aditya Walia
Cofounder
aditya@nexbloc.com
