What is the Hype Surrounding NFTs?
Most of us are probably used to people spending millions on buying art pieces, but 69 million for a piece of NFT art? “Is this NFT-thing worth the money?”, or “What is NFT?” you may be wondering. Before determining whether it is wise to depart with your hard-earned cash for digital work, let us first explore what NFT actually is.
What is NFT?
NFT stands for Non-Fungible Token, built with the same blockchain technique that nurtured the birth of cryptocurrencies like Bitcoin and Ethereum. However, NFT isn’t just another coin. In fact, it differs from most of the cryptocurrencies existing in the market, as it is non-fungible. In other words, unlike BTCs in which any one of them is interchangeable with others, every NFT is unique and of a different value.
This makes it the perfect digital asset representing creations ranging from art, music, GIF and even virtual avatars, which can normally be purchased with cryptocurrencies. In terms of scarcity, NFT can be collectibles as precious as a real-life limited-edition handbag or an Lionel Messi-autographed football.
NFT and Art
NFT fundamentally changes the art industry for content creators with its natural advantage of being a product built on the ethereum blockchain. The history of an NFT can be easily-traced in the public record and is almost impossible to be forged. Hence, NFTs can also be seen as a reliable digital proof of authenticity for the artworks they represent.
Furthermore, this new media of art empowers creators to monetise their works at a reasonable level. With the NFT technique, artists would have access to who can view their pieces, instead of the normal circumstances we see online where artworks are freely available on social media. Requests can be programmed within the NFT to transfer further payment to the creator whenever the art is being sold again, guaranteeing artists a constant royalty income.
Furthermore, directly selling works through NFT for both the artist and the buyer reaps huge cost savings, in lieu of hiring galleries or auction houses. As such, NFT is indeed shaking up the art industry for a reason.
Investing in NFT
For those who are interested in buying, check with your seller to see what cryptocurrencies they accept, then set up a digital wallet to store both the NFT you bought and the crypto.
However, if you’re joining the new trend as an investor, remember that no profit is promised. The price of an NFT is solely based on the demand of that particular product rather than factors such as industry prospects and company management which you can better rely on when buying stocks. Just like how the “Doge” meme may be worth 4 million dollars to someone, but at the same time means nothing to you. Well, good luck!
Other use cases for NFTs
Creating digital scarcity for assets was extremely difficult prior to non-fungible tokens. Other than crypto-collectibles and art, people are exploring more alternative use cases for non-fungible tokens for assets. One creative use case is for exchanging Data. Measurable Data Token, a data exchange project which incubates RewardMe, is one of the pioneers that endeavour to prove the value and legitimate ownership of users’ data.
In MDT’s data ecosystem on blockchain, users’ data point is anonymously shared and rewarded for its value created. With the help of the NFT token, users are empowered with the right to monetize their data. When users exchange the NFT tokens, they are not only exchanging the rightful ownership of their data points in the ecosystem, but also the future revenues these data points potentially can create.
Graphic Credits: Katherine Huang
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