What are Non-Fungible Tokens or NFTs?
With all of the buzz around NFTs and cryptography, it is only fair to clear the air and provide some context so that the next time you hear about NFTs in a conversation, you can add your two cents. To understand NFTs, you should first be familiar with the concept of Cryptography. Cryptography is a technique that encodes digital entities or a private message into special sequences that can only be deciphered by intended recipients.
A non-fungible token, or NFT, is a one-of-a-kind digital artwork whose legitimacy can be proved via blockchain technology. NFT can be any real-world or digital object such as music, video, digital art, or in-game items.
NFTs have their own worth, unlike cryptocurrencies, which are fungible, meaning they are unique, interchangeable, and replaceable. Because each NFT is completely original and one-of-a-kind, each has its distinct value from the others.
NFTs have only been around for a short time. A virtual game enabled NFT tokenization for in-game goods such as digital shields, swords, and other game treasures in 2017. Tokenization of in-game goods allows players to swap and sell NFTs between games via a specifically curated NFT marketplace. According to the records, the NFT industry is projected to grow even more with the current market of $250 million.
Digital Art and NFT
We've previously demonstrated that NFTs are reshaping the digital marketplace by harnessing the benefits of blockchain technology. The digital creative production community, on the other hand, is seeing a significant transition as a result of the introduction of NFTs. NFTs are drawing an unusual mix of artists and collectors to bid on some of the most notable digital art creations. Why? Years of releasing digital art and material on massive media platforms have resulted in the concern of digital art theft.
Artists devote many hours to their work just to have it stolen several times. Through blockchain encoding, NFTs enable genuine ownership of art. NFTs allow artists to fully own and market their work.
Many artists have bagged multi-million deals on their digital artwork. Mike Winkelmann, also known as Beeple, produced this piece of digital art, a collage made up of 5,000 digital elements, turned it into an NFT, and then sold it. The bidding began at $100 at Christie's auction on March 11, 2021, later sold for the staggering US $69 million.
Beeple, ‘EVERYDAYS: THE FIRST 5000 DAYS’, 2007–20. Courtesy of the artist and Christie’s
Artists can create NFTs of their artwork to prevent forgery by associating a secure blockchain to it. When you purchase an NFT, you are purchasing the right to transfer the token to your digital wallet. As if you owned an original painting, the token confirms that your copy of a digital asset is the original. Artists can legitimize the ownership of their art by creating NFTs out of their artwork. Your private crypto key is proof that you possess the original.