What is an NFT?
- July 21, 2020
- 12:18 pm
So? What are they?
NFT stands for Non-Fungible-Token. And is essentially a digital piece of ‘art’ be it an illustration, video, or sound file that is auctioned off to the highest bidder, to own the original file and the rights to it. Imagine you want to buy a famous painting, you go to an auction, bid for the artwork, then (if you win), take the piece of art home with you to display in your dining room. Purchasing an NFT is the exact same concept, you own the artwork, and for the most part, you own the rights to the file. Except, you can’t hang a video on your bedroom wall…
This is where there is confusion surrounding NFT’s. Someone can buy an NFT for £1000 let’s say. They own that file and the right to it. However, anyone on the internet can still view the file, download the file, and for the most part do with it whatever they please. So why on Earth would someone pay £1000’s (sometimes £100,000’s) for digital art, when anyone can go onto the internet and download the file for free?
Well, the most common and most obvious reason is the same as why someone would want to purchase an original Leonardo DaVinci, rather than a print…
Bragging rights.
There’s a world out there, where saying you own the original ‘sneezing panda’ video is a SERIOUS bragging right. Just like owning an original Picasso or Dali is. But then there’s the ‘making money’ side of an NFT. Owning the rights to a famous online video, song or digital image can be a good investment.
If a big company wants to use one of the NFT’s you own in an advertisement, they will have to approach you to agree on the cost of using your NFT, and the more popular or famous the NFT is that you own, the more companies will be willing to pay you to use it. However, NFT’s can also work like Bitcoins, you could buy one for a certain price, then sell it for much much more a few years later.
Within the short amount of time that NFT’s have been a thing. There have already been some absolutely crazy price tags for the most sought-after digital files. The ‘disaster girl meme’ JPEG image sold for $555,000, an Edward Snowden text document sold for $5.4 Million, and Beeple’s ‘Everydays’ digital image sold for an absolutely staggering, wait for it… $69 Million. Remember, anyone with an internet connection can still view and download these files for free, whenever they like.
As you can guess, it seems like the NFT ‘craze’ has only just begun and it seems there are so many different avenues and opportunities that could arise from NFT’s. But will it be a craze or it will continue to be a new way of purchasing digital content? Will we one day look back on people that bought paintings and shun them for not buying NFT’s? Maybe. We’ll just have to see what happens within the next couple of years.
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