Home / Brand Stories / What are NFTs?

By now, you must have heard that  Amitabh Bachchan himself sold some items as NFTs and that the Bhai himself (Salman Khan) has also said he’s going to be coming out with his own NFTs soon. Before that, the Twitter CEO sold a single tweet for millions, and a digital artist sold a single painting as an NFT for more than $60 million. All of this is great, but what exactly are NFTs and can you buy one?

So, what are NFTs?

The term non-fungible token has most of the information you need right there in the name. Non-fungible basically means that it cannot be replaced by anything else; it is unique. For example, while a rupee or a Bitcoin is fungible—where one rupee or Bitcoin is exactly the same as another—a painting or a song is not. You cannot exchange the Mona Lisa for The Scream as if there was no difference between the two paintings. Stairway to Heaven and Highway to Hell are not interchangeable songs. They are non-fungible.

Tokens refer to the fact that NFTs are created on a blockchain (right now, the majority are on the Ethereum blockchain).

So, putting those terms together, a non-fungible token is a block on a blockchain that stores additional information which makes those tokens function differently from regular cryptocurrencies.

What can we do with NFTs?

Most of the buzz around NFTs are to do with the sale of artwork in the form of these tokens, but NFTs can be anything digital. For example, Jack Dorsey, the Founder and CEO of Twitter, sold his very first tweet (which is also the very first tweet ever) for more than $2.9 million. A digital artwork piece by Mike Winkelmann aka Beeple sold for a whopping $69 million as an NFT.

But this is what is interesting about NFTs as it reveals an insight into human nature. Jack Dorsey’s tweet has been freely available on the internet to view by anybody, even those without a twitter account. However, now his tweet is ‘owned’ by somebody else. This does not stop anybody from viewing the tweet as they always did. The NFT simply certifies that the tweet is owned by the owner of the NFT. Ownership does not come with any associated benefits, apart from bragging rights.

Similarly, innumerable copies of the artwork sold by Beeple can be created, but only one person owns the artwork. While it is easy to make the comparison between an original painting and prints of that painting, the thing with digital art is that a copy is an exact duplicate.

What are the benefits of NFTs?

As a creator of art, the birth of NFTs could potentially give you access to markets that would otherwise not have been interested in your work. The novelty of the medium is such that people are willing to buy art that they otherwise would not have.

The other benefit to art creators is that NFTs are essentially lines of code, and so that code can carry anything. Several NFTs already include the provision that the original creator of the artwork gets a percentage of the price an NFT is sold for each subsequent time it is sold. This does not work for physical art.

As a buyer, NFTs allow you to support new artists and, of course, give you the bragging rights of being the owner of a particular piece of art. As a speculator, NFTs work like any other artwork or rare commodity. Speculators can buy them on the hunch that their future value is going to increase.

There have also been some efforts to link NFTs to real-world objects. For example, Nike has patented a method to verify the authenticity of its sneakers using an NFT system, called CryptoKicks.

Overall, NFTs are a new way for people to take advantage of the benefits of blockchain technology, especially the veracity it lends to any information. There is still some time for NFTs to become mainstream, but in the meantime, if you want to buy some digital art, then NFTs are a fun way to go.

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