PICTURE THAT PAINTING above your sofa in your living room replaced by a screen displaying an NFT. For some curious dummies like me, who understand little to nothing in the tech world, have been trying to find out what it means and why it has been popping on our screens very often lately, the word NFT has been making a buzz recently with some NFT artworks selling for millions. After spending a few hours reading and asking around my tech- geek friends, here is what I found. What is it anyway? An NFT is a Non-Fungible Token considered as a certificate of authenticity or a deed to confirm that you have the right to display a digital asset on your wall or in your digital wallet. It may provide you with the right of ownership of the purchased copy but not necessarily over the ownership of the original digital asset. Also, production rights and copyright are automatically retained by the author of the original asset unless otherwise specified in the contract. By digital asset, we’re talking about all kinds of digital objects- digital artwork, images, videos, GIFs, music, virtual real estate, videogames, posts, text even tweets and a lot more. Yes, you heard it right even a tweet. For instance, the first tweet from Twitter boss Jack Dorsey – just setting up my twttr – sold for $2.9 million as an NFT in March. NFTs are usually bought with cryptocurrencies or in dollars and the blockchain keeps a record of transactions. While the NFT can be viewed by anyone, only the buyer has the status of being the official owner – a kind of digital bragging rights. Why the excitement? Some argue that NFTs surged as a result of lockdowns that forced people to spend much time on the internet than never before. Others say that the fuss is caused by the feeling of owning something scarce. Because each NFT is unique; it’s also reflected in its name non-fungible, which means ‘irreplaceable’ since each token is unique. And ‘Unique’ creates scarcity which, in turn, increases the market value for NFTs. Speaking of market value, The NFTs have been traded since 2017 but they surged in 2021 amassing around $10.7 Billion in the third quarter of 2021, a 38,000% growth, and people go where money goes. Another reason is that it might have come as a solution to trust issues where it was difficult to prove ownership and originality. For instance, an NFT contains a unique identifiable number (Token ID), artistic information, historical information of any transactions of the assets(Bidding history, trading history etc…), smart contract where standard copyright law applies and more specific conditions can be added to the description section and a list of unlockables ( For instance when The Kings of Leon created 3 pieces of NFT art supporting their latest album they specified that the buyers would receive NFT perks like 4 front row tickets for each of their tours for life.) Why are they important? NFTs have presented a new marketplace to artists as well as creatives to display, promote and sell their work. It has also provided a link between the digital and non-digital art in that the non- digital art can be digitized by capturing it in form of video, image, a 3D rendering and adding montages and more to be sold digitally. Enthusiasts portray NFTs as the future of ownership. Because all kinds of assets and property, from event tickets, land to houses- will eventually see their ownership status tokenized. NFTs could potentially solve the royalties problems for artists. Artists have the ability of being directly paid large sums of money from selling their work to highest bidders. Additionally, they have the ability, through the abovementioned smart contract, to collect a royalty (say 10%) each time the NFT changes hands after the initial sale. The only limitation is the artist’s imagination when it comes to NFTs. Are there any risks? With all the potential mentioned above, NFTs carry some risks too. Like cryptocurrencies, they’re unregulated as anyone can create and sell an NFT and there will be no guarantee of its value. That is largely because not all NFTs verify if the person selling the original art piece is the original creator. Another risk is that losses can be massive if the hype melts down.
