Artfully Nifty NFTs
Have you heard about NFTs? You're probably asking: “What are NFTs?” It is an acronym for “non-fungible tokens” which are trending like crazy in today’s news that involve the seemingly opposite sectors of blockchain technology and art collecting. Seriously. Read on for some further explanations…
Some basic definitions are in order
First, let’s break down the meaning of “non-fungible token.”
- The word “fungible” is anything that can replace (or be replaced) by an identical item. Say for example, someone gives you a five-dollar bill. The next day, you give him or her a different five-dollar bill. The five-dollar bill is the “fungible” item because the value is the same.
- Something “non-fungible” is therefore a singular item that cannot be replicated—or replaced. The element of being irreplaceable translates to the non-fungible item (or rather, “token”) as being of high value. So, a “non-fungible token” (NFT) is something that is literally a one-of-a-kind item, the way many people might look at baseball cards or other collectibles.
Some technical information about NFTs
In the world of high-tech currency, NFTs are, as explained in Investopedia, cryptographic assets on blockchain technology that have unique identification codes and meta data that differentiate them from each other—hence, the one-of-a-kind factor. This also means that an NFT cannot be traded or exchanged at equivalency. The NFT is also remarkably versatile, as it can represent any real-world item, such as real estate, a person’s identity, property rights, and even art.
How NFTs operate—and their value
As Mitchell Clark further clarifies in The Verge, NFTs have recently become the go-to technology for selling digital art. And the theoretical potential value of some of this digital art can be astronomical, as someone reportedly paid close to $390,000 for a 50-second music video entitled “Death of the Old” by Grimes. Someone else also paid $6.6 million for a video by digital artist Beeple.
If an NFT is digital and online, can’t anyone get a copy of it?
Mr. Clark points out that, yes, anyone can copy a digital file—including art or music that is included with an NFT. Keep in mind, however, that since the original file has been classified as NFT, the ownership of the work cannot be copied. The parallel is that while there are many reproductions of classic works of art, there remains only one original. And that is why the prices of certain works of digital art and music run as high as they do: The super-wealthy collectors who make these purchases are paying for the right to own the original. (See above, and how “property rights” can serve as NFTs.)
The ultimate benefit of NFTs—safety
In the fever pitch of purchasing digital art and music, with so much currency being exchanged, there would naturally be concern over theft or fraud. Not so. As Investopedia notes, if a work of art, music, or any other tangible item is classified as NFT, it means that any transaction—buying, selling, or trading—can be conducted more efficiently and with the reduced possibility of fraud. (Investopedia refers to this as “tokenizing.”)
Is this the wave of the cryptocurrency future? It is too early to tell, but it is indeed a sign of how sophisticated—and secure—the possibilities of making transactions in the future may reach to.
On a side note, with artwork being a focus of NFTs, could this be material for a Robert Langdon adventure by Dan Brown?