NFT art

What are NFTs?

An NFT in simple terms, is the deed to a digital creation.

All the excitement around NFTs, are based on its use case as a method of transferring ownership digitally, without using a paper trail. (Not even Docusign)

NFT is not the JPG or PSD file.

For instance, if you mint(create) an NFT based on an artwork you created, that particular NFT is not the JPG or PSD file. An NFT is a deed that verifies that YOU created, the artwork in question. Since NFTs are stored in the blockchain, this deed will never be lost. 

Let’s get technical.

An NFT, stands for Non Fungible Tokens. But to understand it better, let’s dive in step by step.

To understand an NFT, you need to understand blockchains. Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger and it’s available through the entire network of computers on the blockchain. This is the basis of cryptocurrency.

Now, when you take an NFT, an NFT is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. For instance, if you and I each have 1 bitcoin and you exchange it with my bitcoin, at the end of the transaction, the net change is zero. But you can’t interchange NFTs. It will be like trying to interchange a Van Gogh with a 2B pencil.

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art. NFTs are now being used to commodify digital assets in art, music, sports, and other popular entertainment. Most NFTs are part of the Ethereum blockchain; however, other blockchains can implement their own versions of NFTs.

We are really excited about the repetitive royalty functionality of an NFT. That means the original artist keeps getting a commission, even after they no longer own the NFT. This is revolutionary.

If you take the Mona Lisa, the true value of it lies in the pedigree. The fact that you can authenticate it as the original art done by Leonardo da Vinci. Similarly, the value of an NFT lies in the authentication. It verifies the original artist, avoiding the sale of a replica.

The NFT market grew from $250 Million to $40 Billion in 2021. Digital artwork entitled “Everydays – The First 5000 Days”, by artist known as Beeple, sold for US$69.3 million in 2021 along with many others being auctioned for exorbitant amounts.

But the real value of NFTs, is in how it can help creators from around the world, get discovered and generate continuous value for their creations.