What NFT’s Even Mean?
NFT”s are all the rage right now, and you might be wondering what it”s all about. You’re not alone. So, let’s discuss this newest blockchain trend.
What does NFT mean?
NFT stands for Non-Fungible Token. If you are like me, this did not make it any clearer for you. Non-fungible means it’s a unique thing and cannot be replaced with something else. For example, cryptocurrency is fungible because it can be replaced with another cryptocurrency. But one-of-a-kind piece of art is unique, non-fungible. Because if you replaced it with another piece of art, you would have just that — a completely different art. NFT Tokens are digital assets that can be transferred between people on Blockchain. Its uniqueness is what gives it several potential uses.
NFTs are part of the Ethereum Blockchain (most of them, anyway), but other blockchains can also support their versions of NFTs. NFTs are anything digital, such as drawings, music, collectibles, gaming, virtual assets. NFTs also allows for a flexible way to store, control, and protect the information related to one’s identity.
NFT’s exist since 2012, with the introduction of colored coins built on the Bitcoin network, followed by CryptoPunks in 2017, followed by the most successful and well-known NFT project to date, CryptoKitties. These days, lots of the excitement is about using the platforms to sell Digital Art. NFT’s are looked at as the evolution of digital art collecting.
And even though NFT’s can be downloaded and copied thousands of times, if you purchase NFTs, you get the ownership of the work. So like with actual art, anyone can own a copy of the Mona Lisa, but there is only one owner of the original one.
For artists, NFT’s are a great way to monetize their work because there are not that many platforms to sell their art. NFT’s also allow them to get a percentage every time their work resells, creating residual income, which is super cool.
For buyers, it gives you some sort of ownership of the said art and also, good feeling that you supported the artist. You can then use the art in your projects, websites, etc., and you have Blockchain backed ownership proof.
If you are a collector, you can speculate like with any other asset. Will the art go up in price? Will it become super popular, and you can resell it for a hefty profit? Nobody knows.
Because NFT’s are tokens, you can decide whether your NFT will be unique, just like Mona Lisa, and there will be only one piece, or if you want to make it like trading cards and have many numbered copies of it.
The truth is, anything digital can be sold as NFT, which leaves so much space for imagination and success. It also leaves room for speculations, so be careful from whom you buy.
Where should you look if you want to buy or sell NFT’s? There are several platforms, such as OpenSea, Rarible, Nifty Gateway, MakersPlace, and more. Some games let you have NFT’s as items. Through In-game purchases, you can buy items such as kitty, or sword, or uniform as NFT. That’s cool for gamers, as some can be resold for profit.
The great thing about NFT’s being part of Blockchain is its safety. As Blockchain logs in and traces the time of each transaction, it makes it almost impossible to hack and steal NFT’s. You can also use any cryptocurrency to buy NFT’s. It is up to the platform or the seller what they accept. NFT’s, just like cryptocurrencies, are then stored in digital wallets (but it has to be NFT’s compatible wallet). So what do you actually get when you buy NFT? When you buy NFT from somebody, you are purchasing a token that represents that unique item. Meaning you will receive only a small file, usually containing a URL or serial number. This information will be sent to your address on Blockchain. This token means that you own this specific, unique item and that the item is authentic. And if you own that NFT, nobody else can own it unless you resell it. It’s like a deed to your house. It’s the certificate of ownership, not the asset itself.
So if you buy NFT for digital art, the NFT is not the art itself; it is the certificate of ownership and authenticity stored on Blockchain. The file with the art is hosted elsewhere.
To give you an example, if you buy a print of the Golden Gate bridge, you do not own the artwork, and you cannot use it on your social media, on your websites, on your product packaging. The art still belongs to the artist, that created it. However, if you buy NFT of that image gives your print value, even though the copyright ownership might still stay with the original author of the work. Many NFT’s come with additional terms, so be sure you read in detail what your NFT comes with to fully understand what you can and cannot do with your NFT. If you are buying ownership rights with your NFT’s, make sure the seller is the owner of the assets and put the transfer of ownership in writing.
As with any transaction and any investment, make sure you do your due diligence before buying any NFT’s. Knowledge is the key to making smart decisions, and understanding Blockchain and knowing what you can do with the art you buy is critical here.