WHAT IS NFT?

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In recent years, digitalization is one of the most popular topics in every field. NFTs are another important topic of these days when we hear about the crypto market every day, and names and terms such as Elon Musk, Bitcoin, blockchain are now processed in our brains. NFT is, in a nutshell, digital personalized artworks. Be sure to read our article that we have compiled for you to answer your questions such as what is NFT!

What is NFT?

NFT as Non-fungible token, that is, unchangeable token. But the explanation is not enough here, it would be useful to go into a little more detail. "Immutable" means "Non-fungible" is more or less unique and cannot be replaced by anything else. So NFTs are unique. For example Bitcoin is exchangeable, you can exchange one for another bitcoin and get exactly the same thing. However, a one-of-a-kind trading card cannot be exchanged. You can exchange it for a different card and have something completely different. To give an example from the 90s, we can say that you can trade the Pokemon card and get a football card.

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency like bitcoin or dogecoin. But blockchains also support these NFTs, which store extra information that makes it work differently than coins, for example an ETH coin. It is worth noting that other blockchains, cryptocurrencies, may implement their own versions of NFT. In short, you can buy NFTs with cryptocurrencies. Most of the markets accept Ethereum. But technically, anyone can sell an NFT and ask for any currency they want. Like cryptocurrencies, NFTs are stored in digital wallets. It should also be noted that the wallet should be especially NFT compatible.

NFTs can be anything digital, like music or drawing. But much of the excitement here is about using technology to sell digital art. In other words, a newly formed digital commerce field excites people more than owning a work of art. Some people hope that NFTs will become digital art collectibles, such as those who paid almost $390,000 for a 50-second video of Grimes, or $6.6 million for a video of digital artist Mike Winkelmann known as Beeple.

If you've come this far without closing the page or getting distracted, watch out because things are going to get a little weird! You can copy a digital file as many times as you want, including the art contained in the NFT.

But NFTs are designed to give you something that cannot be replicated: ownership of the business. Only the owner of that NFT can hold the copyright and reproduction rights, just like physical works of art. In terms of physical art collectors: anyone can buy a Monet print, but only one can own the original.

The image, which Beeple sold at auction at Christies, sold for $69 million. By the way, let's also mention that Monet's Nymphéas painting sold in 2014 is $15 million more. Whoever took Monet can treat it as a physical object. In digital art, too, a copy is literally as good as the original. Each NFT is unique on the blockchain. But it can be like a Van Gogh with only one true version, or like a trading card with 50 or hundreds of numbered copies of the same artwork.

What is the Purpose of NFT?

The purpose of NFTs depends on whether you are an artist or a buyer. If you're an artist, NFTs might be of interest to you because it opens up a new market for you, a way to sell your work. Also, NFTs have a feature that you can activate, where you will be paid a percentage each time the NFT is sold or changed hands; this allows you to get some of the advantage if your work is super popular.

If you are a buyer, one of the obvious benefits of purchasing artwork is that it allows you to financially support the artists you love, and this applies to NFTs as well. Purchasing an NFT usually also gives you some basic usage rights, such as posting the image online or setting it as your profile picture. Plus, of course, they have the right to brag that you have the art, and there's a blockchain entry to back it up.

If you're an art collector, NFTs can work like any other speculative asset you buy and hope to increase in value one day. So you can sell it for profit.

Who Pays For This?

That's part of what makes NFTs so complex. Some people treat NFTs as the future of fine art collectibles, and some people treat them as collectibles, like Pokémon cards. Did you know that YouTuber Logan Paul was paid $200,000 for a video clip? Technically anything digital can be sold as an NFT.

There have been some attempts to connect NFTs to real world objects. Nike has patented a method for verifying the authenticity of sneakers using an NFT system it calls CryptoKicks.

NFTs became technically possible when the Ethereum blockchain backed them up as part of a new standard. One of the first uses was a game called CryptoKitties that allowed users to trade and sell virtual kittens. We love cats, but not as much as the person who gave 170,000 dollars to a virtual cat...

But these virtual cats also show one of the most interesting aspects of NFTs, how they can be used in games. Currently, some games can buy NFTs as items, and some even sell them. Players can have the opportunity to purchase a unique in-game weapon or helmet or anything as an NFT, something most people will really use and appreciate.

Can NFTs Be Stolen?

Part of the appeal of blockchain is that it keeps a record of each time a transaction occurs, which makes it more difficult to steal and flip than a hanging painting in a museum, for example. However, cryptocurrencies have been stolen before, so it really will depend on how the NFT is stored and how hard a potential victim will be willing to work to get their stuff back.

Don't be too sure that NFTs will exist 500 years from now, because bit rot is a real thing: image quality deteriorates, file formats can no longer be opened, websites crash, people forget their wallet password. But it should not be forgotten that physical art in museums is also surprisingly fragile.

NFT and Global Warming

Definitely something to watch out for is the impact of NFT on global warming. NFTs also use a lot of electricity as they use the same blockchain technology as some energy-hungry cryptocurrencies. There are people working to alleviate this problem, but so far most NFTs are still tied to cryptocurrencies, which generate a lot of greenhouse gas emissions. There have been a few cases where artists have decided not to sell NFTs or cancel future discounts after hearing about their impact on climate change

Source: The Verge