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NFTs: where did that come from?

20.3.21
#Blockchain #Cyrptography

NFTs and what are they

Social media and online outlets have been covering NFTs and highlighting how it is being leveraged to authenticate an asset as 'original copy' in the digital world. This paves the ability for digital creators, and alike, to capitalise on their digital assets and auction them within the realm of the real world 'highest bidder wins' to engage in transactional relationships for their created assets.

A non-fungible token (NFT) is a unit of data on a digital ledger called a blockchain, where each NFT can represent a unique digital item, and thus they are not interchangeable. NFTs can represent digital files such as art, audio, video, and other forms of creative work. While the digital files themselves are infinitely reproducible, the NFTs representing them are tracked on their underlying blockchains and provide buyers with proof of ownership.

The path forward

It is undeniable that digital assets and blockchain technology are changing the future of trade. As a result, NFTs are also at the helm of this positive growth. However, just like other examples in history (e.g. the Dutch Tulip, the dotcom bubble, etc.), certain valuations may see the need for future corrections depending on socio-economic desires and the chance of a bubble.

Every generation has its own niche attachment to certain valuations whether for vanity or other reasons. NFTs are currently very popular among younger generations, but whether this generation will have the economic power to purchase or find use for them in the future, is both a social and economic question.

For NFTs the true potential is yet to be uncovered. Whether big industry players in art, design or fashion will buy into it or not is also yet to be seen. One thing is for sure, NFTs did open the door for many digital artists to be identified and valued, and the smart contract functionalities of the blockchain technology will be used in future valuations of many assets.

Links to original articles;

https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

https://www.cnet.com/news/nfts-explained-these-pricey-tokens-are-as-weird-as-you-think-they-are/

https://theconversation.com/what-are-nfts-and-why-are-people-paying-millions-for-them-157035

https://medium.com/@nic__carter/why-nfts-are-hard-to-explain-48f0ab0a35bf

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