25th of March, 2021
The current buzzword in 2021, NFT is causing tingling fingers for many investors, blockchain geeks and adventure seekers.
But, what is a NFT?
Bitcoin seems to be the answer for new digital currency, while NFTs are the answer to digital collectibles available for trade or keeping.
NFT is short for non-fungible token, which seems complicated to understand, but really is not.
A fungible assets is something that can be interchanged like currency (e.g money).
On the other hand, non-fungible basically means that it’s one-of-a-kind and can’t be replaced by anything else. A bitcoin, for example, is fungible, meaning you can swap one for another and get exactly the same thing. A one-of-a-kind trading card, on the other hand, cannot be duplicated. You’d get something totally different if you swapped it for a different card.
In the digital world, NFTs are “one-of-a-kind” properties that can be purchased and sold like any other piece of property, but they have no physical structure.
The digital tokens can be compared to ownership certificates for virtual or physical properties.
Can I not just copy a valuable NFT?
Not exactly. You can, but it would not be the original.
Paintings and other traditional works of art are valuable because they are one-of-a-kind. Digital files, on the other hand, can be quickly and permanently duplicated. Artwork can be “tokenised” with NFTs to establish a digital certificate of ownership that can be purchased and sold.
In the world of influencer marketing, influencers could potentially take their valuable digital assets and tokenised these with NFTs.
A record of who owns what, similar to crypto-currency, is held on a public ledger known as the blockchain. Since the ledger is kept by thousands of machines all over the world, the documents cannot be forged.
NFTs may also provide smart contracts that, for example, offer the influencer a share of any potential token sales.
So yes, you could go about copying an original NFT, but it would just somewhat be an “autograph” version of the original. The value wouldn’t be the same.
So, I can just make a lot of NFTs and sell them for millions?
NFTs are still so new and highly risky for investments. Creating NFTs is not for free, and is also driven by supply and demand. There is a high chance that no one will want to buy your NFT, therefore providing 0 value.
As an artist or influencer
You may be interested in NFTs because they allow you to sell work that would otherwise be difficult to sell. If you have a great idea for a digital sticker, try it out. See if it works for you. This could also be interesting for influencers who are looking to create extra value with their digital assets. We see a big possibility that NFTs and influencers will overlap.
As a buyer
NFTs can function similarly to any other risky asset in that you buy it and hope that its value rises over time so that you can sell it for a profit. If you feel a little risky, go for it.
What is the moral of the story?
NFT are risky business, but if you are ready for a little adventure, feel lucky or just want to test out new investment options – get into NFTs!