Non-fungible tokens have entered the public conversation in the form of digital ownership. The concept is new, and you are not alone if you don’t understand what an NFT is.
It could be a piece of art or a video of a famous athlete. Instead of making a poster and signing it, after which it will hang on a teenager’s wall, the digital world is grabbing these new collector items. Non-fungible tokens operate on the blockchain and are considered part of the crypto trading landscape.
Alt Text: Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’sfor more than 69 million dollars. Image: Beeple
What is a Non-Fungible Token?
The term non-fungible means that it’s unique. For example, if you purchase regular gasoline, the gasoline you buy at gas station A should be the same gasoline you buy at gasoline B. Paper towels and soda cans are fungible as they are not unique, and you can replace one with another and receive the same value. Most commodity trading involves fungible assets. Most of the non-fungible tokens (NFT) run on the Ethereum Blockchain, which allows for their exchange. While NFTs are unique, they can be traded using a blockchain concept. The benefit of the proof-of-work blockchain that Ethereum uses guarantees that the NFT is unique. An identical NFT does not have to be created or accepted by another party. An NFT can currently be any piece of digital information. It can be a Facebook post, an Instagram picture, or a video of your favorite basketball player ducking during a game.
How Do NFTs Work?
The process starts with a digital asset. Once this is created, a digital signature is created and stored on the blockchain once purchased (using dollars or Ether). The digital asset creators are those who tokenize the digital asset, thus creating a digital certificate and signature of ownership. The NFT can then be exchanged over the blockchain using a crypto trading blockchain like Ether.
Are NFT Networks Increasing Accessibility?
The leader in creating digital collectibles for athletes is the National Basketball Association. The NBA owns its own NFT collectible community called NBA Top Shot. The website allows you to purchase classic moments of NBA highlights for individual players or packs of unique videos similar to trading cards, except they are NFTs. This collectible arena is one of the best possibilities for NFTs to reach the mainstream. Instead of owning a poster of Kevin Durant making a game-winning shot, you can have an NFT video that shows it to you again and again. As of October of 2021, Top Shot has collected nearly 750 million in sales from more than 10 million transactions. However, these robust numbers are nothing in comparison to the Beeple moment. The first of its kind digital asset NFT sold at Christie’s Auction House in March of 2021 for more than 69 million dollars. According to sources, the most artist Mike Winkelmann, known as Beeple, had sold a picture for was $100.
Your Rights When you Buy an NFT
When you purchase an NFT, you own the usage rights to use the digital art. While these can be copied, they cannot be used in a way that would allow you to say that you hold ownership of the digital information in a court. If you are a commercial entity, you can use digital art in a marketing campaign. If you purchase an NFT that is a song, you have the right to play that song at a concert or in the park, or at your home.
What Has Led to the Introduction of NFTs?
The world as we know it now is full of videos and digital pictures. Everyone is carrying a phone and can view digital information wherever they go. You can purchase an NFT on your mobile device and take it everywhere. You can also create digital assets and eventually an NFT through your mobile device. The world has changed to a digital environment, and making unique assets through this process is becoming more critical. Using a digital document, you can make a contract a digital purchase through Ether. Laws can be created and made on digital copies in oreder to create NFTs. There does not seem to be any limit on the number of digital items that can be produced and then stamped as unique using the blockchain.
The Bottom Line
NFT’s are gaining attention as the world shifts to a digital age. An NFT is a unique digital piece of information created on a blockchain Ethereum. NFTs have been selling as digital art, Tweets, Texts, and videos. The NBA has created its own NFT trading environment called NBA Top Shot. The popularity of mobile devices has increased access to creating digital information as well as the ability to view digital information on the go.