NFTs are all the rage these days, but not everyone understands their true potential. These are digital tokens that will completely revolutionize entire industries by changing the way we share and consume just about everything. That’s huge, and we’re just getting started in this phase of NFT adoption.
Think of this revolution as the era of social media adoption in the early 2010s or even before, when Facebook, Snapchat, Instagram, Twitter, and LinkedIn were introduced, and people were skeptical about their use. Most people thought – why would anyone care what someone eats for lunch and drinks before dinner. Or why would anyone post on LinkedIn when it’s just a resume sharing site.
Most people still believe that NFTs are just a marketplace for digital art and dismiss them as gambling or something for the rich.
What is an NFT?
NFT is short for Non-Fungible Tokens . It is a single digital asset such as artwork, trading cards, memes, gifs, music videos, audio clips, tweets, this article or an ebook, basically anything that can be created, stored and sold on the blockchain . Once tokenized, these assets can be bought, sold, and traded using cryptocurrencies.
But it’s not just an artistic or creative digital asset that you can flaunt in front of your friends, neighbors and family. It’s even possible to attach digital contracts that entitle you to special benefits such as access to a private conference, podcast interviews, exclusive events, more future NFTs and much more.
Why is it called “non-fungible”?
Fungibility means interchangeability. Thus, two units that can be exchanged equally are fungible. Let’s say I give you a $10 note. If you give me in return two separate tickets of 5€ each, we are quits. This is because every €5 note has the same value no matter what. Thus, money or fiat currencies are fungible assets. Similarly, bitcoin is a fungible token.
On the other hand, consider two Harry Potter books. They may have the same story and cover, but one of them is the first edition signed by JK Rowling. So you can’t trade them equally, and so they’re non-fungible.
Frequently Asked Questions (FAQ) About NFTs
Why should I buy an NFT if I can just copy-paste the JPEG image and save it?
Yes, you can easily copy-paste an NFT art from the JPEG file. But that doesn’t give you the commercial rights to use that art elsewhere, and doesn’t make you the owner. An original Starry Night or Mona Lisa are extremely valuable, and anyone can make copies. But the original works of art will always remain in the respective museums, and no one will ever be able to use them for commercial purposes as a company logo, official mascot, etc. unless you buy them legitimately.
As NFTs are stored on the blockchain, a public registry of ownership is accessible to everyone. Also, a digital collectible is much easier to transport and display than a physical collectible. When you buy a valuable piece of art or a souvenir, you can only show it to those who visit you. But with NFTs, all you have to do is share your wallet‘s public address, and everyone can see what you have.
What good is an NFT to me if I’m not interested in collecting art?
NFTs rose to popularity when Mike Winkelmann, the digital artist known as Beeple, sold a painting for a staggering $69 million. But that doesn’t mean that NFTs are just for selling digital paintings. This year, Gary Vaynerchuk sold his collection of NFTs called VeeFriends for $59 million in the first Dutch auction. With the purchase of a VeeFriends token, you receive a digital version of a doodle, originally drawn by hand by GaryVee.
But that’s not all. Each VeeFriends token comes with a three-year entry token to VeeCon, a multi-day superconference with an amazing speaker schedule, collaboration experiences, and the opportunity to network with a community of people motivated and like-minded. Some tokens even come with other amazing redemption options, such as one-on-one talks with GaryVee, group calls, and podcast interviews.
In essence, while NFTs, in their current state, look like collectibles, creators can do a lot more to bring value to buyers. One day, coaching sessions, concert tickets, limited music video releases, financial statements, and even real estate contracts will be stored on the blockchain through smart contracts and NFTs.
How can I start buying NFTs?
There are several ways to purchase an NFT , depending on the project you are interested in. There are a series of blockchains that are becoming increasingly popular, including Ethereum (ETH), Solana (SOL), Polkadot (DOT) , ImmutableX (IMX) and many others. Ethereum is currently the main blockchain service for issuing NFTs.
Some of the most popular and innovative NFT projects, such as VeeFriends, Cryptopunks, BAYC, The Doge Pound, and Beeple, are built on the Ethereum blockchain.
Currently, you need to create an undeposited cryptocurrency wallet and open an account on one of the NFT marketplaces such as OpenSea to start buying and selling NFT.
The benefits of NFTs
NFTs will completely revolutionize entire industries by changing the way we share and consume just about everything. That’s huge, and we’re just getting started in this phase of NFT adoption.
- Non-fungible tokens (NFTs) are stored and traded on a blockchain platform, the most common being Ethereum. This makes them trustworthy and tamper-proof since counterfeiting is difficult for decentralized and permanent registration.
- Creators can retain ownership rights to their work and claim resale royalties directly without the need for a third party like a publisher, media agency, or other distribution platform.
- NFTs enable a transfer of revenue from marketers (or distributors) to consumers through commerce and give complete autonomy to the creator.
- An NFT is accompanied by a digital certificate of ownership , and transaction history is publicly available.
Should you buy NFTs to make money in the future?
That said, non-fungible tokens are still in the early stages of their evolution, as tradable assets, and investing in them is very risky. They are volatile, and one should do proper research before making any investment decision. It’s like investing in the cryptocurrency market in 2015. It could be a very lucrative investment if you do your research and invest smartly. But make sure you only invest what you can afford to lose. It’s Web 3.0. If all goes well, NFTs will be ubiquitous.