Just when we thought that we finally understood crypto and the idea of the Metaverse, NFTs came into the game, leaving us even more confused than we were before.
So what does NFT actually mean?
The ubiquitous acronym stands for non-fungible token. Huh?
Bear with us. Non-fungible means non-replaceable and distinctive. NFT is a form of digital asset that is unique and is bought and sold online using cryptocurrency.
An NFT can be any form of digital art, such as music, drawings, or even a meme like the Disaster Girl photo, which sold for $500k in early 2021. Yes, people make a fortune in this new digitalized art market.
NFT is simply a unit of data stored and secured on a public digital ledger, called a blockchain, which can be traded or sold. As the owner of an NFT, you get a percentage of the sale price every time your NFT is sold in a legitimate marketplace through NFT royalties.
What happens when you buy one?
Buying an NFT from someone does not mean you own the digital or physical assets it represents, though, unless specified at the purchase point.
It is easy to verify claims of ownership by checking transaction history. Because technically, and it is really all about the technicalities here, buying or selling an NFT is not selling the image or the copyrights of a song but units of data that give you ownership of it on the blockchain.
Some artists and collectors assume that NFTs are the future of digital art, creating a gatekeepers-free market where artists can express themselves and buyers and collectors are able to own said art and use it on some platforms.
For example, you can set the NFT image you bought as your profile picture or post it online. Owning an NFT comes with some bragging rights, especially if it is one of the high-end ones like the Bored Ape Yacht Club, which is basically digital drawings of, well, you guessed it, bored apes.
These NFTs have proven very attractive to some of the most famous celebrities ranging from Kylie Jenner to Jay-Z and Eminem.
Then there is also The Merge, an NFT created by an artist who goes by the pseudonym Pak, that became the most expensive NFT ever sold to date for a mind-boggling 91.8 million dollars.
We are not sure how NFTs are going to develop and how value is now going to be placed on art in the physical world, but we know that is going to be interesting to explore.
