Imagine if artists could digitally sell their art to a global audience instantaneously, whilst maintaining its authenticity. And then imagine if you could link use cases or physical benefits to this digital art, that is redeemable in the real world. Welcome to NFT’s.
I always try and explain NFT’s to my friends and family and most of them look at me like I’m slightly crazy. Crazy or not, NFT’s are going to be a huge part of our future and taking the time to learn about this new technology right now, could immensely benefit you in the long term. And perhaps I am nuts, and totally wrong, the worst-case scenario is that you learnt something new.
To begin to explain NFT’s, the terminology needs to be broken down. It stands for Non-Fungible Token. The words fungible or non-fungible can be attributed to anything in our physical economy such as t-shirts or cups. A cup, bought from Ikea, is considered to be fungible as there are thousands upon thousands of these cups that are all exactly the same and if you received a broken cup, you could easily exchange it at Ikea for another cup that is identical. Therefore, things like cups are determined as fungible. Non-Fungible assets are classified as art, or unique 1 of 1 creations that cannot simply be replaced.
Now you might be asking yourself, can we not copy and save these digital images that are considered non-fungible for free? This is where the token part of the abbreviation NFT comes in. NFT’s are irreplaceable as they are created and exist on the blockchain, and when you mint an NFT from an official source, it receives a unique token ID that identifies the non-fungible asset as the original and that is where the value is attributed. Just like the Mona Lisa, there are thousands of very good replicas you can buy or print for free, however we can verify through experts which one the original is and that one is worth millions of dollars. This process is simplified on the block chain as a public ledger enables us to follow transaction history and easily identify and verify original artworks and collectibles. This technology enables artists and creatives to market their non-fungible assets to the entire globe instead of being limited to physical constraints such as local buyer limitations or shipping.
The next question you might ask yourself, is why on earth do people buy these? I’ve been investing for almost 2 years, and there is simply no other digital marketplace in which you can receive the returns that you do in NFTs. Many argue it’s a bubble, and many NFTs are actually worthless, or will be, but within this chaotic and confusing pile of opportunity, lies golden projects that will change many industries as we know it.
My biggest focus going into next year is something called crypto gaming, this combines the standard gaming industry as we know it but replaces in game currencies and digital assets with crypto currency and NFTs. This category of gaming titled play-to-earn, will in my opinion, replace traditional gaming and surpass the market cap of cryptocurrency itself.
NFT’s are far more than digital art or collectibles, the current movement within the NFT world is towards utility and what perks or access your NFT provides. Think of NFTs as the next version of membership cards, or access to new products, or even democratized ownership of real estate in the physical or digital world. This is what I will be working on during my time at Pulsed in the Entrepreneurship track, to try and peruse a utility based real estate NFT project.