NFTs, or non-fungible tokens, are the latest gold rush to seize the imagination of the crypto community. They are blockchain-inscribed certificates of ownership attached to digital media. They promise to bring a sense of ownership to digital art that opens the door to the creation of a thriving, eclectic marketplace that connects artists and their fans, and creators with the communities who want to support them.
Early Successes of NFTs
Everyone seems to be getting in on the act. William Shatner sold an X-ray of his teeth, Jack Dorsey sold his first ever tweet, and Mila Kunis and Ashton Kutcher sold NFT tokens of Stoner Cats that, as well as giving their holders ownership of the token, also doubled up as exclusive tickets to watch an animated series written by Mila Kunis.
The most promising use of these tokens seems to be in the creation of collectible sets, with trailblazers like the Cryptopunks, now trading for a minimum of six figures each and new crazes like Degenerate Ape Academy, single handedly hoisting the Solana blockchain on its back and walking them to the moon.
How Do NFTs Work?
Still confused? Let’s explain. Assets like Bitcoin or the US Dollar are fungible – as in, their value, even if it varies, is easily exchangeable for something else. You go to the store and can buy milk with the dollar. You can swap Bitcoins for US Dollars and, crucially, you can swap it right back. Their values are interchangeable, determined by the market.
NFTs are more like art. If you walked to the shops and tried to buy beef jerky with the Mona Lisa then, although the cashier would be a fool not to accept your offer of payment, it’s highly likely they would reject it. The Mona Lisa’s value is speculative, changeable, and possibly infinite. It’s not a medium of exchange. Rather, it’s a singular piece with a unique, socially ascertained notion of value.
What are the Benefits of NFTs?
The great benefit of NFTs is that because they are “minted” on the blockchain, their certificate of ownership can never be altered or stolen. You can try to pass off your print of the Mona Lisa as the original, and you might even get away with it. Yet you could never do that with NFTs. This certainty and inherent individuality of ownership, then, allows creators to sell digital media with an NFT stamp that gives it value to a collector.
Where it gets confusing for most is the fact that although you may own the NFT of an image, the image itself is, of course, still available on the internet. This has given many, even in the crypto-world, pause. How can you truly own something endlessly – and perfectly – copyable? Yet for enthusiasts, ownership of the NFT is valuable enough. Yes, every hotel room can have a print of Van Gogh’s Starry Night, but only one person can own the original. The same is true for the digital media world of NFTs.
What Use Cases Are There for NFTs?
One of the most exciting possible practical use-cases for NFTs is ticketing. Sports teams have already begun experimenting with offering tickets as NFTs, as they then can’t be hoarded or traded without the issuers permission (if, indeed, that code has been written into the NFT itself). Mark Cuban’s Mavericks have vowed to use them for ticketing, and they won’t be the last sports team to do so.
This can help to create a powerful ownership economy. It helps to mold your digital identity, something our team is incredibly passionate about, and allows you to express yourself through the items that you own in your wallet.
NFTs, with the blockchain authenticating their ownership, have the chance to create a whole new marketplace & economy. Judging by the extravagant sums already being thrown at some of the first movers in the space and the furious trading in digital collectibles, one might say they already have.