NFT is short for Non-Fungible Token which is a unique token that is present on a blockchain. Yes, NFTs are possible because of the blockchain technology, and yes, the last month at least I’ve been researching this from top to bottom (that is why I did not write anything new here).
I believe myself to be a geek when it comes to technology, and I heard about blockchain and bitcoin around 2015 the first time, when I was doing freelancing work and got paid by a partner in bitcoin. Of course, I used those BTC to buy something at that time and I am not sorry for it, no one could have predicted the current outcome.
I can talk about blockchain for days, and I will do so in future posts, but the main topic here is NFT and how it will actually change the world.
Why is the NFT technology so important?
As I said in the intro, NFTs are unique tokens in a blockchain, that cannot be reproduced and will never have the same “value” as another token or NFT token. An NFT can be minted (the process that creates the NFT) as a single copy of it or it can be minted as X copies of it, this being a decision that the author will make.
Authenticity and Ownership
I mentioned above the author, and I believe this is the most important value that NFTs bring: authenticity and ownership. Until this technology was available, there was no solid way to prove that you are the author of a piece of digital work.
Let’s say you are a digital designer, and you also like to draw a lot, and throughout your career, you created a lot of funny digital illustrations (comics let call them). Now, they are highly appreciated on the internet, but you cannot offer proof that you are the creator of them. Also, they are copied a lot by people that like to do this shit, and they say they are the actual creator of it (boo for this type of people, they make me sick). I believe you get the point, by minting an NFT you can prove you are the author of that work regardless of how many people will copy it and say otherwise.
Of course, once you mint it and prove you are the author, you can sell it!
The value of any piece of art in this world is also brought by the scarcity of it. Imagine Da Vinci did 5 copies of the Mona Lisa paintings, identical. The value of each will be smaller than the current value of the single painting at the Louvre.
So, remember the minting process I mentioned above? well, based on the author’s decision on how many copies he wants to create, it will influence the value of each piece itself. Neat right?
Not only an author gets paid when he sells and NFT, but he is also giving the ownership right upon that digital work to the buyer, information that will be stored in the blockchain (decentralized ledger) and everyone can check that the new owner of that digital artwork is X and how that piece of art was traded.
Based on how the minting process was done, and based on the blockchain (yes there are many and that is very good) the NFT was created, the author can (and will) receive subsequent % of future sales. Was this possible until now? NO!
These are marely the most important properties I see today in this technology. There a lot more and the use of them can be infinite.
Why NFT will change the world?
Not only because of the above-mentioned properties but because it opens unlimited doors to everyone.
Each artist, whatever the field, will be able to make money with his work and creativity, and buyers will be able to collect “artwork” even if it’s an image, or song, or blog post, or tweet or literally whatever. Mindblowing right?
Now think more:
- real-estate: you buy a property and the proof of ownership is an NFT that no one can ever contest.
- will: in the US, but not only, are multiple lawsuits on wealth distribution after one’s death. If the will would be an NFT, everything would be there and no one could contest it
- Sports: think of a moment from a match that defined that entire season (already done by NBA top shots) but also think of owning the jersey that Ronaldinho wore when he won the Champions League + and NFT stating just that
- Concerts (of any sorts): after it happens, the artist will mint 10 NFTs with backstage pictures or rehearsal moments that no one has seen.
- and more and more and more, literally, the sky is the limit.
NFTs are extremely disruptive to our current global ecosystem and will change the way we see the world, interact and own valued assets. This is very good, I would say extremely good for everyone, I love this change!
Is NFT a bubble that is going to burst?
The technology definitely NOT! It’s sound, it has tremendous value and it will be here for a long long time.
The artworks themselves that are currently on the market, well I do strongly believe those are overpriced as shit. Don’t get me wrong, I value the work of everyone, first of all as a manager.
Early believers and adopters have a head start and they do have some benefits in determining the price and direction of the market. So maybe an artwork you buy today for 100$ can be valued in 2 years at 1$ or 1000$. There are millions of factors here at play, so I suggest you do your own research and understand what you are actually buying.
As closing thoughts, I would say we are just scratching the tip of the blockchain and NFT iceberg. It’s truly immense and impressive. Get aquatinted with it and understand it from your own perspective so you can profit from it in the long term.
The intro picture is a representation of Beeple’s “First 5000 days” NFT that was sold for ~60 MIL USD.