As we enter a new era where the likes of Paris Hilton tries to add her own input on NFT’s, we take a look at the cold facts.
What is blockchain crypto art?
We explain what NFTs are and how this whole blockchain cyrpto art stuff works, the dangers and the false ideals.
What are NFTs
There’s nothing like an explosion in the blockchain news streams to leave you thinking, ’What’s this all about?’. At least that was the reaction I’ve experienced while reading about NFTs being sold for millions. Just as we all thought we knew what the deal was with Crypto and Blockchain, the founder of Twitter put up an autographed tweet for sale as an NFT... So let us dive into this and debunk the myths from the facts!
So you are wondering: what is an NFT?
After literally days of research and hours of reading, we finally know. But be prepared, this could also make you think we are crazier than you first thought.
Okay, let’s start with the basics...
What does NFT stand for?
Yes, that makes it so much clearer
That doesn’t make it any clearer.
True,sorry. ’Non-fungible’ means that it is unique and cannot be replaced with something else. For example, a crypto currency coin (bitcoin) is fungible - trade one of them for another one, and you will have exactly the same thing. A one-of-a-kind item, say a unique drawing, is non-fungible. If you traded it for a different drawing, you would have something completely different.
How do NFTs work?
At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs. (Some already have.)
What do NFT owners sell?
NFTs can really be anything digital (such as drawings, a music track, poetry) but a lot of the current excitement is around using the tech to sell digital assets. Imagine you are playing a game, you complete some stage of the game and get some kind of pass card. This could be a NFT, you could trade this to users who need that pass card. A lot of the hype is based now on games that allow you to earn while you play
The Danger of NFT’s!
Ideally NFT’s are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). So the game player, art collector or trader can know this is the genuine item and therefore attach a price to it. The danger here is that you do not really own anything, you own an entry to the blockchain that relates in some way to the item you are buying. You might not own the copyright, you might not even be able to stop the creator duplicating this and selling a second one, or many of them. Digital assets, like anything, will be copied and downloaded for free by people, only a few will pay for them.
What is the point of NFT’s then?
That really depends on what side of the block-chain you sit on, are you an artist (creator) or a buyer (Collector/gamer).
I am the creator.
You might be interested in NFT’s because it gives you a way to sell your work that otherwise might not be open to market sales, if you come up with a really cool digital sticker idea, what are you going to do? Sell it on the e-auction site?
NFT’s have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets traded and popularity balloons, you will see some of that benefit in actual value.
I am a buyer.
One of the obvious benefits of buying art is it lets you financially support artists you like. NFT’s also gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up. NFT’s can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit.
So every NFT is unique?
In the boring, technical sense that every NFT is a unique token on the blockchain - Yes. But while it could be like any art/image, where there’s only one definitive actual version, it could also be like a trading card, where there’s 50 or hundreds of numbered copies of the same artwork.