In simple words, an NFT or a non-fungible token is like a digital signature on virtual art. It is a record of ownership that ensures that the owned piece of art or anything else is not faked. It records everyone who has ever owned the thing and the record lives on an open-source blockchain.
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NFTs can be extremely valuable, their cost running into even six figures. The value of an NFT is based on its popularity and every NFT is a unique one being different from others, that is why it is ‘non-fungible’. NFTs can only exist as whole numbers and are non-divisible unlike cryptocurrencies that can be further divided into decimal points.
An NFT is like a ‘digital asset’ or a digital code that contains certain information that is stored on a blockchain network. There are NFT marketplaces which are online platforms to buy and sell NFTs. People who want to participate in this market need to set up an account with it and need a compatible cryptocurrency wallet. The NFT`s price is given in cryptocurrency although in some marketplaces they are even priced on the basis of fiat currency. For selling NFTs, the sellers select the NFT from their own wallet and set it up on a website along with its price. NFTs can also be sold through auction. If there is sale, the marketplace debits the sale price along with transaction fees from the buyer`s cryptocurrency wallet and then transferring the NFT to the buyer`s wallet.
NFTs have had a huge effect during the past year and even got official recognition by Merriam-Webster, which added the definition of NFTs or non-fungible tokens to its dictionary. The digital artist Beeple made a sale of $70 million in early 2021.It marked the beginning of a new age of digital art making it an important asset. Beeple`s NFT consisted of a JPEG file with a collage of his photographs taken over a period of 5000 days. This sale is the third most expensive work sold by an artist.
Image Source: BEEPLE`S NFT
https://www.theverge.com/2021/3/11/22325054/beeple-christies-nft-sale-cost-everydays-69-million
NFTs have also been powerful in sports, fashion, media, entertainment and government worlds. This year NBA partnered with Dapper Labs in Canada to create NBA Top Shots. These NBA Top Shots are collectible highlight videos. A LeBron James Top Shot was sold for $200,000 including three Top Shots featuring him and having one of the most expensive Top Shot sold as of May 2021.
In fashion, Givenchy created 15 NFTs collaborating with the artist, Chito. The profits made by the auction were said to benefit a non -profit. Dolce & Gabbana announced the debut of its “Fashion NFT wearables”. These NFTs were supposed to bridge the gap between the physical and metaphysical and can be worn virtually through “ augmented reality”.
CNN announced the launch of historic moments NFTs including space travel, technological advances and election results. Even Time and Fortune also started using digital media in the form of NFTs in 2022. Time sold three of its iconic and original covers as collectibles in the form of NFTs. In music, John Lennon’s son Julian said he plans to sell NFTs of The Beatles in the form of audiovisual collectibles like guitars, clothing, etc. of his father.
NFT market is extremely fast as well as interesting, the only drawback being the legal issues in its buying and selling. NFTs are going to be a part of the digital marketplace as long as blockchain exists. There is no way through which an NFT can be deleted once it is on blockchain other than ‘burning’ it by sending it to a null or burn address.
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