Fancy yourself some original pieces of art? Well then, Non-Fungible Tokens are the right investments for you! Today, this has become one of the most high-priced art markets, with original pieces going for over several thousand dollars.
What is an NFT?
NFTs is the abbreviated version of Non-Fungible Tokens.
Now, what are Fungible and Non-Fungible Tokens in the world of crypto?
Fungible coins are the ones that are not unique and can thus be exchanged, while Non-Fungible Tokens are unique coins or Tokens that can not be exchanged. The information stored in each NFT differs from another. Consequently, if you attempt to exchange Non-Fungible Tokens, you’ll deal with two different Tokens.
A more standard definition of NFTs, according to the Collins dictionary, reads, “A unique digital certificate, registered in a blockchain, that is to record the ownership of an asset such as an artwork or a collectible”
Basically, it is an encrypted certificate of ownership of digital media. The use of blockchain to create NFTs is vital in maintaining the uniqueness of the product sold as NFTs. Blockchains’ distributed and encrypted, makes it extremely hard to tamper with an NFT unless the change is coming from the owner’s side.
One year ago, NFTs were not as popular as they are today. However, 2021 was a year of growth for the field of NFTS. In fact, it was voted as the word of the year towards the end of 2021. This article focuses on all the crucial aspects of NFTs and their future applications.
How Does it Work?
NFTs are a function of the cryptocurrency called Ethereum. Ethereum is also a blockchain like Bitcoin, but it is mainly to support these NFTs. These tokens differ from an Eth coin as they are developed to store some extra information compared to any other fungible coins.
Interestingly, other blockchains can develop their own versions of NFTs. In fact, some of them are already in the process of development. Maybe in a year, we could talk about the growth of a new type of NFT!
What is the Worth of an Non Fungible Tokens?
An NFT can represent anything ranging from digital art, music, clothing, props in a game, etc. It’s just anything that the designers want to remain unique.
Mostly, the NFT market has grown around digital art. While it might not be the same as a physical copy of the Mona Lisa, the digital art purchased as an NFT also has tremendous value. In fact, recently, a video by the Beeple sold for around $6.6 million.
The catch is this: you might be able to find the exact video online, but it is just a copy of the original. The individual who paid millions for it has the original video and the right of ownership.
NFTs might eventually lead to the digitalization of the entire art collection process! And this future is not too far away! In fact, there are already communities that revolve around the collection of NFTs as art. For example, the Penguin Community deals with collecting NFTs called Pudgy Penguins.
Who Benefits the Most from Non Fungible Tokens in the Current Scene?
In today’s technological world, the only application of NFT that has vastly developed is the field of digital art. Therefore the two primary participants of this trade are the artist and the collectors.
As an artist, you have a new dimension to all the artworks you create, and it’s no longer just the physical art but a digitalized expression of your art. This could fetch you a good fortune when sold as an NFT.
NFTs also have an additional feature of guaranteeing you a percentage of profit every time your NFT sold or exchanged.
It’ll be just like any other investment you make as a collector. Hopefully, as the years progress, NFTs become rather popular that you would resell them for a profit! NFTs also have the possibility of becoming the future of fine art collections.
Where Can One Buy Non Fungible Tokens?
Numerous marketplaces are springing up specifically for NFTs, and individuals will be provided a platform to sell and buy NFTs. The major platforms that exist today are OpenSea, Rarible, Nifty Gateway, and Grimes’ choice.
You will require an Eth wallet and some Eth coins to start off with. Connect your Eth wallet to the platform you’re shopping from, and go ahead, start browsing!
Are Non Fungible Tokens a Fading Trend or the Future?
While NFTs might not be as well-known as Bitcoins, it is definitely a growing technology sphere.
Huge brands such as Marvel and Nike have all taken to NFTs to launch collectibles. This is widely accepted by the younger generations, who are starting to gain interest in NFTs. Some of the youth have even turned to NFTs to sell their art!
In the current technological scene, numerous big companies and industries are investing in NFTs. Therefore, it may continue to flourish as a field.
Apart from art, developers have been attempting to diversify the applications of NFTs. The two significant avenues of development likely to happen this year are:
- NFTs and Metaverse
Besides NFTs and crypto, the metaverse is also a trending field of discussion in today’s technological world. It is a connected digital ecosystem that involves virtual reality and augmented reality. You can socialize, work, play and travel through the metaverse. In simple terms, it is a virtual expansion of our existence.
NFTs play an essential role in this virtual reality, and it allows the collection of unique items to display in your virtual world. Just like how fancy assets are shown with pride in the real world, NFTs will enable you to express your unique virtual belongings with great pride!
The development of metaverse might even increase the possibility of having virtual avatars living our lives. In that case, NFTs will no longer be just images and videos; instead, they can become functioning virtual objects for your avatar.
- NFTs and IoT
The Internet of Things is a system of connected devices that includes computers, vehicles, appliances, wearables, and industrial machinery.
These devices are connected through a machine-to-machine system of communication.
NFTs have a great potential in this sector to authenticate the information obtained from connected devices. In other words, NFTs could function like warehouse managers who take inventory during a delivery.
The Negative Side of Non Fungible Tokens
Despite the exponential growth of NFTs over the past year, there are still several people against the development of NFTs.
One of the major causes for concern is the extremely high amounts of energy used for the blockchain technology behind NFTs. Furthermore, cryptocurrency is also responsible for emitting considerable greenhouse gasses into the atmosphere. Numerous artists and companies have dropped the idea of launching their NFTs due to the negative ecological impact of this blockchain.
Additionally, bit rot is another problem that arises with NFTs. This form of digital art might not survive centuries as the file formats won’t work, websites might go down, or even the image quality could deteriorate.
As more and more individuals are turning towards cryptocurrency as a worthwhile investment, the popularity of NFTs has also been drastically developing. Non-Fungible Tokens have slowly become an essential element of cryptocurrencies within the blockchain arena.
The rapid growth has encouraged developers to identify alternative energy sources and thus eliminate the one major ecological drawback of blockchains and NFTs in particular.