Decoding NFTs

 

Decoding NFTs

NFTs, short for Non-Fungible Tokens, are digital tokens that give their owners a unique identifier. Just like cryptocurrencies, they are virtual currencies that are secured by the Ethereum blockchain, allowing people to own various types of items of arts or other collectibles. Once bought, they cannot be interchanged for any other item. Although NFTs are akin to cryptocurrencies, they are different than the latter because they can represent totally different items and could be evaluated alternately.

NFTs are unique because their files hold additional information digitally. For instance, even if they are replicated, the copied or downloaded files will not be able to store authentications that are incorporated in the original.  Owing to this very reason, NFTs are said to be empowering creators of these assets on digital platforms.  

Notable assets sold as NFTs, besides arts, collectibles, gifs, music, etc., include intangible items.  As these are available only digitally, a buyer of NFT gets only a digital file. It allows the owners to add more detailed information inside them. As stated, NFTs are available for various items, including arts, videos and games. Therefore, they are sold and bought online only using cryptocurrencies.

Introduced in 2014, they have surged in popularity, thanks to increased transactions of digital art assets. Although the assets (mostly unique and sought-after) can be accessed by others, individuals buy them to bag their copyrights in order to gain name and fame. The owners can then sell them directly to consumers, instead of exhibiting them in galleries or auctioning them off, allowing them to make more profits. Moreover, creators of these artworks will gain royalties whenever they are bought by a new owner. This would not be possible if these assets were sold physically. 

To own NFTs, one has to buy a cryptocurrency specified by the provider.  Alternately, one can use credit cards to transact on virtual platforms, like Coinbase or PayPal. The two most popular sites for NFTs are Rarible and Foundation.  

But among some bizarre items sold using NFTs are Twitter founder Jacky Dorsey’s first tweet, published originally in March 2006, and the original source code written by Tim Berner’s Lee for his invention, world wide web. They both were bought for hundreds of thousands of dollars.