NFTs are Non-Fungible Tokens. Does this ring a bell yet? I didn’t think so either.
Briefly summarised, NFTs are tokens that are unique and cannot be replaced with something else. Because of this, it’s perfect for digital collectibles, art, luxury goods and all sorts of other physical and digital products that can be verified on the blockchain. However, it’s more than just art or collectibles, because it could also be a certificate of authenticity, a festival ticket, etc.
NFTs have left plenty of artists with questions. However, there’s also plenty of artists who understand the value and jump on the train to create their digital pieces or even create proof-of-ownership NFTs for physical pieces.
How do NFTs work?
NFTs were initially created on mainly the Ethereum Network, as individual tokens with information stored in them to make then unique. Because they’re unique, they hold a certain value - of course this value differs based on who created the NFT, e.g. a well-known artist, singer, band, sports brand (NBA).
However, due to the high ethereum network gas fees we’re now also seeing NFTs being minted on Polkadot, Binance Smart Chain, Wax and various other chains.
Examples of NFTs
One of the maybe most well-known NFTs right now are NBA TopShot Cards.
Users who purchase ‘player packs’ can open these packs to receive different cards called ‘player moments’. These player moments are digital collectibles, similar to Pokemon cards or baseball cards, however now digital. These moments show special moments of basketball games in the form of a short video, with that moment being attached to this player’s name and card.
There is a maximum number this exact player moment can be minted, each one of them has a unique ID. Say there’s 250 editions minted on-chain of a player moment, there’d be 250 unique cards on the blockchain with ID 1-250. If I had #249 and I would sell it, the buyer would receive #249, and not suddenly #1 or #9, etc. - the ID remains unique and this helps to create scarcity among collectibles.
This same technique applies to art, for example Beeple (a well-known artist) sold one of his digital artworks for a whopping $69,346,250. With only one edition available. It’s clear that art has received more questions from the community, because, realistically - one could just right click and save the image and own the exact same artwork right?
That’s basically true, although, in many collector’s and artists their minds this is not the case and the art holds value because of its unique ID on the blockchain. Similar to holding a physical (1/1) edition of a painting.
Where can I purchase NFTs?
One problem in the NFT space right now is that they’re fragmented across different platforms, marketplaces and blockchains. We have yet to experience a party that actually manages to combine these into one place. This would significantly ease the way of purchasing NFTs and keeping track of their values.
Here’s a short list of examples of marketplaces where you can purchase NFTs:
How do you feel about NFTs? Are they here to stay? Which use-case for NFTs do you find most interesting? We’d love to hear from you in the den.