What is an NFT?
The invention of blockchain technology has entirely shifted the way that we think about currency. Multiple forms of cryptocurrency, like Bitcoin, Dogecoin and Ethereum, have creeped up utilizing this technology to create decentralized financial systems. Instead of being reliant on supercomputers or banks to protect our money, the collective crypto community works together to manage the blockchain. Miners validate transactions, people keep their private keys secret, and the blockchain makes it all possible. But blockchain is not just for cryptocurrency.
The popularity of NFTs, or non-fungible tokens, could shift the way we look at digital content and art forever. Essentially, rather than a Bitcoin — or realistically a portion of a bitcoin — being traded on the blockchain, an NFT is a digital file. The technology can be used to track ownership of individual files like photos, pieces of art, music or video files, and even tweets. Jack Dorsey, the CEO of Twitter, has famously sold his first tweet as an NFT for 1,630.58 ether which is essentially $2.9 million. The wider adoption of cryptocurrency is in part popularizing the adoption of NFTs.
The Benefits of NFTs
The benefits of NFTs are they help protect intellectual property (IP). With digital content, any song, video, or photo can be sent indefinitely. While that’s great for free information it doesn’t always serve content creators. After all, a painter can earn a million dollars for one painting but a graphic designer could potentially see thousands of people use their work without any credit or payment. NFTs add scarcity to digital content and they also help track ownership. The first NFT sold at auction at Christie’s in March 2021. “Everydays: The First 5000 Days” by Beeple sold for $69,346,250 dollars at auction. The digital collage’s huge price tag has helped validate NFTs as a way to merchandise digital art.
In addition to helping digital artists get paid for art that can be reproduced indefinitely, ownership of their work is built into the coding. For example, Beeple will receive a 10% cut from any future sales of his piece. Utilizing this technology can help protect artists from being taken advantage of. Not only do they get a cut of future sales and their ownership of their content is tracked but it can also help protect from piracy and copyright infringement.
As an experiment, NYTimes columnist Kevin Roose, sold their column as an NFT. Now there’s no telling if the NFT is just part of the crypto craze that’s driving up returns on cryptocurrency investments. But people are purchasing everything from tweets to art to gifs. And artists are shifting their focus to NFTs as a potential way to earn more from their creations. After all, prints are made in limited quantities so why shouldn’t digital art be afforded the same benefit?
What in the NFT is a Crypto Kitty?!?
Crypto Kitties is an Ethereum based game. It involves buying, selling, and breeding cats that are each an NFT. In theory, this all sounds crazy. But countless games have digital currency or purchasable upgrades. While Crypto Kitties may be a fad of the crypto craze there are many potential applications for NFTs. It can help track concert tickets, prevent musical piracy, and manage video rights.
NFTs could be the wave of the future. They introduce scarcity and legitimacy to digital content creation that serves artists. They preserve the value of intellectual property while helping give artists the ability to make more from their work. So while blockchain may best be associated with cryptocurrency, the economy is not the only thing being affected by this technological advancement.
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