It’s hype, it’s novel, it’s exciting, and it might change the world as we know it. 2021 was undoubtedly the year of bitcoin and cryptocurrencies and it was also the year where non-fungible-tokens (NFTs), went truly mainstream.
There is always a higher level of excitement and curiosity when new ground is broken in the crypto world: queue the NFT. So here’s what you need to know.
What Exactly are NFTs… Simplified for the Rest of us
It goes beyond a $600 000 cat GIF or how the NBA is selling moments of NBA games for hundreds of thousands. It’s about human psychology and how the way we value things is shifting because of technology. NFTs are a form of cryptocurrency like Bitcoin, only instead of holding money, they contain assets like art and music. In simpler terms, non-fungible-tokens are non-replaceable. Unlike a bag of rice, think of the Mona Lisa, one of a kind, which immediately spikes up to its value because of its uniqueness and the fact that it’s the only one that exists with its own distinct value.
A fungible token is an asset that can be exchanged on a one-for-one basis, versus a non-fungible object that has its own distinct value, like a designer bag or a classic car. If we merge the concept with blockchain, the technology which underpins cryptocurrencies, we have ourselves NFTs that are effectively digital certificates of authenticity that can be attached to any media that comes in digital form; audio files, video clips, or illustrations and GIFs.
Why Would You Pay for an NFT When You Can Look at it for Free?
Technically, NFTs are not that new. They were created around 2013 when people realized they wanted to trade assets, and later collectables, other than Bitcoin on the Bitcoin blockchain. You can take a photo of the Mona Lisa in the Louvre or buy a print from the museum gift shop but that doesn’t mean you own the original artwork. The same can be said of modern art forms like digital art which can be downloaded from the internet and printed.
In addition, NFTs’ built-in blockchain authentication provides proof of ownership; it’s like an “original” of a digital asset, which makes it more attractive to invest in and own. Owning one creates the permanence and ownership experience that we enjoy with physical items, but for digital assets. And that’s become a major draw for many people, which ultimately lead to its popularity and trending boom.
There’s Always Room for Innovation
NFTs allow artists to monetize their work in a new way, empowering them to eliminate third parties and form direct relationships with their buyers and fans. In fact, some NFT issuers even give full copyrights to the buyer.
Is the Future a Boom or Bust?
We need to keep in mind that the unregulated nature of NFTs is creating skepticism among many professionals, may it be artists, investors, or crypto experts. The future of NFTs remains slightly vague, but the opportunity to explore their potential is not to be missed, especially when they’ve paved the way for a lot of innovative digital concepts such as smart contracts and helped crypto investors and artists secure a reliable source of income. So whether you’re new to this whole concept or familiar with the industry, it’s never a bad idea to dive in and become an expert.
The Engineer’s degree (diplôme d’ingénieur) with a major in Financial Engineering at ESiLV, a CTI-accredited engineering school, is a major that aims to train future engineers in all the innovative technology that is essential for evolving and innovating in businesses that are reinventing financial professions, with a variation of job roles like Blockchain Developer, Blockchain Architect, Cryptocurrency Trader, Data Analyst, Scientist, Insurtech Project Manager, Cryptocurrency Consultant, R&D Engineer, Banking Application Developer, Security, and Cryptocurrency Engineer.
See you on the other side of the screen!