Decoding NFT's

We live in a world where technology is growing and developing amazing things and though it has it's share of goods and bad's but lately it's all about the goods, like really good. We all have heard about Bitcoin or Dogecoin or Ethereum, all of these are a digital form of currency or an asset. And as digital assets and their classifications are multiplying and evolving right alongside cryptographic and blockchain technology. Non-fungible tokens (NFT's) are another example of the fast-paced change in the industry.

This year we were introduced to a very new term known as Non Fungible Tokens (NFT)

Picture credit: The Internet

Before we learn about NFT's, we need to learn the difference between Fungible and Non Fungible Tokens .

For example, Bitcoin is a fungible token. You can send someone 1 Bitcoin and they can send one back, and you still have one Bitcoin though the value of that bitcoin will depend upon the time you send or receive them. Just like share value can vary depending upon time you purchase or sell. And since Bitcoins are Fungible Tokens they are hence divisible as it can be send or receive in any desired quantity whether it can be a big amount or a very small amount ( measured in Satoshis) consider Satoshis a cent or a rupee of the blockchain world.

Whereas, Non-fungible tokens are not divisible, in the same way that you cannot send someone a part of a Movie ticket or a match ticket. A part of a Movie ticket wouldn’t be worth anything on its own and would not be redeemable or divisible.

So this is what separates NFT's from the rest

Picture credit: CNET

SO, WHAT IS AN NFT? AND WHAT MAKES IT SO SPECIAL?

Non-fungible tokens (NFT) is a form of digital asset that uses blockchain technology to record who owns a digital object such as an image or a video. While anyone can view the asset in question, only the buyer can say that they are the “official” owner.

NFT's are supposed to be unique and different, every NFT sold has to have its own different identity. These are items that would otherwise find a market in the physical world, like the first-ever tweet by Twitter founder Jack Dorsey, or a very famous meme or a gif to name a few.

In March of this year, a digital artist named Mike Winkelmann aka ‘Beeple’, sold an NFT of his work at the auction for 69 Million Dollar.

Everyday we come across new emerging NFT artists selling their unique crafted work of art, such as Bored Apes Yacht Club also known as "Bored Apes" or BAYC, World Of Women or Cryptopunk to name a few.

A set of bored apes were sold for a whopping 24.4 Million Dollar. (A picture set of apes with different essence and expressions to it)

BIG BETS BY BIGGER BULLS

NFTs have rapidly become a mainstream popularity and a culture phenomenon, garnering front-page news coverage. Many celebrities including Logan Paul or Garry Vaynerchuk are making big bets on NFT's, infact the internet sensation Logan Paul is heavily investing in Non Fungible Assets he also launched his own NFT known as Crypto Zoo on open sea, In fact they've ranked number 7/10 bringing them in the top 10 NFT's on OpenSea.

Picture credit: Cryptozoo

If that's not all, Garry Vaynerchuk too has announced that he's bringing 5 personal artwork from his NFTs collection veefriends to Christie's (An art auction house)

Infact, Bollywood's mega star Mr Amitabh Bachan too has launched his very first own NFT art work last month.

But wait.

ARE NFT's CONSIDERED AN ART ASSET?

The answer completely depends upon who is assessing the work and the type of NFT you're buying or selling. While the creators and consumers may regard them as art works, traditional insurers consider NFTs to be just a digital asset.

THE GALLANT FUTURE

It’s too early to say if NFT's will hold long-term value like the physical artwork we're all used to. Markets can be irrational and unpredictable it has always been dating back to the 19th century has seen all kinds of ups and downs and NFT's have already experienced half of what the cultural art has seen throughout the decades. NFT's do not have long track records of sales histories, making them difficult to appraise. NFT's are proliferating, but their long-term impact is yet to be determined.

THE CONCLUSION

At present, NFT's are increasing at a great speed, Artists innovate and markets respond to new opportunities. What appears more certain is that the blockchain technology underlying NFT's is here to stay.