One of the hottest online trends of the past few months has been the non-fungible token, commonly abbreviated as “NFT”. Unfortunately, not everyone has heard of this new trend. What is an NFT?
An NFT is a special type of digital file that could be digital artwork, music, or a video (among other things). The file contains a record of ownership inside the metadata that functions as a certificate of authenticity or the providence of a famous painting, proving the true owner of the file in question.
NFTs are purchased by using Ethereum, a form of cryptocurrency similar to Bitcoin. A cryptocurrency, or crypto, is an online commodity that functions exactly the same in most respects as traditional currencies like the United States Dollar or the Peruvian Nuevo Sol. To buy crypto for yourself or check current prices, please visit okx.com.
One of the primary benefits of selling art as an NFT is the ability for artists to set their own prices. Instead of a musician selling an album through the studio system and getting between 10 and 25 percent of CD sales and digital downloads, they can sell their work directly to the fans and receive a much higher percentage. This also benefits the buyer, knowing that they’re directly supporting their favorite artists, instead of giving most of their money to record labels and music executives.
One of the most common criticisms of NFTs is the supposed ability to screenshot or otherwise save a piece of art for free, as opposed to paying for it, but this criticism illustrates a lack of understanding of how NFTs work. The point of purchasing NFTs is being recognized as the rightful owner of a property, either as an investment or simply out of appreciation for the art. Anyone can go online and find a picture of Starry Night by Vincent van Gogh or buy a print somewhere, but the only actual copy is owned by the Van Gogh Museum in Amsterdam. NFTs function in a similar way, in that simply being able to view a file is not equal to owning that file in any meaningful way.
One of the main concepts that give NFTs their value is exclusivity, meaning the creator can decide exactly how many copies exist. When the band Kings of Leon released their album When You See Yourself as an NFT, they minted 20,000 copies, meaning the number of legitimate files from that collection can never exceed that amount. Some NFTs are singularly unique, meaning that only one copy exists and the exact contents might not even be known to anyone except the seller and the buyer.
NFTs have been increasing in popularity steadily over the past few years and that increase is set to continue well into the future. Three years ago, hardly anyone had heard of them and today they’re a billion-dollar industry. NFTs are widely considered the wave of the future for modern art and every day, new artists join the movement by releasing their works as non-fungible tokens. Expect this trend to continue for many years to come.