Lately, there has been an explosion of blockchain news, leaving us wondering why a GIF of a flying baby or a video clip of LeBron executing a single-handed dunk is being sold for millions of dollars.
So, If you’re wondering what is an NFT, this article is for you!
What Is the Meaning of NFT?
NFTs (Non-fungible tokens) The word "fungible" means replaceable, as in a product that may be exchanged for one that is identical. Money notes are fungible. In comparison, the Mona Lisa is non-fungible, meaning you couldn’t visit the Louver and offer to swap the painting with another picture.
How do NFTs work?
NFTs are a digital asset that are stored on networked computers, also known as a blockchain, with a record of transactions. The blockchain serves as a public ledger that allows anybody to verify the NFT's authenticity and ownership. Therefore, when a commodity is bought and sold, transaction records are recorded in a digital ledger.
The NFT trend is great for digital artists, who have long been ignored by professional collectors or want credit for their authentic work. On the other hand, NFTs are terrible for the environment. The computing power needed to support the underlying network, uses nearly as much energy in a year as the entire country of Argentina.
What kind of art can be sold as an NFT?
NFTs can really be anything digital, such as pictures, music, or GIFs, although the current excitement is around selling digital art. And even though this might seem weird, some people have made six or seven figures by creating and investing in such commodities.
Nobody can predict the future, but some people really hope so — especially those who paid almost $390,000 for a 50-second video by Grimes or $6.6 million for a video by Beeple.
And although one can own the same art by right-clicking and downloading the same file, the person who paid millions of dollars for it, the ownership of the work solely belongs to the creator. In terms of real-world art collecting, anyone can purchase a Mona Lisa print. But only one person can own the original.
Lastly, how can you benefit from NFTs?
Well, it depends if you’re an artist or a buyer.
I’m an artist.
First off, way to go! NFTs are one way to sell work that there might not be much of a market for. For example, if you come up with a new digital idea, where are you going to sell it? While you think of the answer, remember that creating and selling NFTs also costs money. However, if you’re lucky enough to have your NFT sold, you’ll get paid a percentage every time.
I’m a buyer.
One of the most obvious advantages of purchasing art is that it allows you to financially support artists you enjoy, and this is also true with NFTs. When you buy an NFT, you usually get some basic usage rights, such as the ability to publish the image online or make it your profile photo. There's also the bragging rights of owning the work, which is backed up by a blockchain entry.
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