Non-fungible tokens, known as NFTs, are the new investment craze. They have recently dominated the cryptocurrency and blockchain conversations. It remains to be seen whether they are a passing fad or if they will stand the test of time.
The Facts
While they are not a new concept – having been around for 10 years or so – NFTs have taken centre stage in the cryptocurrency conversations.
Described by Bloomberg as: “a unique, irreplaceable identifier created by an algorithm: A distinct barcode for a digital piece of art or collectible. It’s a solution of sorts to a problem that’s long faced digital artists: how to create scarcity for an item that can be infinitely reproduced.”
The NFT craze has taken a new turn following the sale of a piece of digital art – by Christies for a whooping $69 million – a first. The art piece – Everydays: the first 5,000 Days – was created by artist Beeple, while the buyer has been kept anonymous.
While NFTs seem to be gaining legitimacy, there are questions around whether they’re merely part of “bubble” or will remain for the long term.
With Christie’s offering NFT digital art and the Beeple piece “Everyday: The First 5,000 Days” going for $69 million, this brings to mind the California Estate sold for $1.6 million or 2,739 Bitcoins in 2014. At the time of writing, these coins are now worth north of $160 million. At the time, three of Montenegro’s most luxurious apartments also sold for 420 Bitcoin – worth $3.2 million at the time. Whenever these kinds of transactions happen on such a prominent scale, we ought to realise we are in the middle of a paradigm shift.
I first noted NFTs with a cryptocurrency Po.et in 2017 that timestamped information about creative content on the blockchain to submit and verify claims. For example: we wouldn’t need to lose 8 years over whether Pharrell Williams broke Marvin Gaye’s Estate’s copyright over Blurred Lines (2013) IP theft. This drawn-out infringement case has stumped artists, stifling their creative work for fear of dispute for having similar ‘vibes’ to another song, i.e. all music builds on the past. The stalemate was obtrusive and NFTs or Nifty’s may hold the answer.
Verification of content ownership plagues creative and regular industries alike: pinterest images not attributed, domain names with registrar intermediaries like GoDaddy bulk buying expired names rising costs, high-end fashion with truckloads of fakes, game hacks where online assets later emerge untraceable, and so on.
From the Blockchain’s answer to medical record management, monitoring supply chains, to voter fraud; NFTs are the market’s answer to copyright and royalty protection, and may yet usher in a new era of innovation.
Scannable garments from smartphone apps will become the norm in the high snobiety, relegating the wannabes and fake-it-til-you-make-it sorts. In this new order you could see what their outfit is actually worth, where it is from, and of course authenticity or otherwise. Given that the luxury goods market is worth some £200 billion, it will be a price worth paying.
I have been cynical about the implications for the online gaming world, until now. With Virtual Reality and Augmented Reality, people integrate the virtual into their real lives. Demand for a deeper more interactive experience requires a greater need to define and authenticate ownership in VR worlds because players will be more attached to their belongings. Online gaming currencies are nothing new, and with trends turning to fads, they fall out of fashion and value. In a future where millions if not billions play a “Ready Player One” online reality with a lottery sized cash prize, we could get there as soon as the technology is available to the multitudes.
From the Blockchain’s answer to medical record management, monitoring supply chains, to voter fraud; NFTs are the market’s answer to copyright and royalty protection, and may yet usher in a new era of innovation.
NFTs are the latest ground-breaking currency that will revolutionise how we own and trade assets in the digital space. This cryptographic token will create new revenue streams for users in various industries such as gaming. Currently, gamers cannot trade in-game items with other users and make money out of trading these items on popular gaming titles. But thanks to NFTs, gamers can exchange these items between different users more easily and if they wanted to make a living.
The benefits of NFTs are not just exclusive to the gaming industry. Digital content creators will not have to worry about copyright because NFTs makes sure there is no copyright infringements, theft or counterfeits of a particular asset. Plus, artists themselves can earn more money using NFTs over other traditional methods. These tokens remove the middle person trying to get more of the pie, providing many benefits to various online creators.
However, with anything new, there are always question marks. These tokens are unique and are still a working process, and further to this, trying to build infrastructure to use these tokens can be very tricky and time-consuming. NFTs are also very complicated for those with zero experience in blockchain, and figuring out all of the different standards that NFTs use will get your head in a spin. Not only that, but those who want to make a quick buck using NFTs can make the market very unstable, meaning there is a higher chance of the market collapsing and for users to make a loss while trading with these tokens.
Yet, despite all of this, there is a genuine interest in these tokens from various people and companies.
The question is when we will be switching to these tokens? Not if.
