What Is NFT and Does It Matter?

NFT stands for Non-Fungible Token, which is backed up by the Ethereum blockchain. It’s the latest trend of digital tokenization to trade digital art forms. “Non-fungible” means uniqueness that can’t be easily exchanged with something else. The way it works is these tokens are traded as certificates of ownership for digital assets. Each token is unique so only one person can own the original version whereas others are free to duplicate the artwork and the artist is still allowed to maintain the copyright and production rights.

Everything can be traded as NFTs including memes and tweets. That meme about cryptocurrency reposted by Elon Musk, Nyan Cat, Side-Eying Chloe is one of the examples. Recently, the founder of Twitter autographed his own tweet and sold it as NFT as well. NFTs like those can be priced up to hundreds of thousands of dollars each. Grimes herself has earned around $6million alone from NFT. Many argue that NFT has evolved fine art collecting into a digital form. However, not a few experts from both the art and blockchain industry are getting skeptical about the prospect of NFT.

Mike Winkelmann, who is better known as Beeple, noted that NFT is a bubble waiting to burst, before auctioning his NFT off at Christie’s for a whopping $69million. Although there is only one unique original version of NFT, thousands of copies of it can exist at the same time. Thus, it’s no wonder that NFT is considered a playground for ultra-rich people to play trading cards. In simple words, NFT means you buy an artwork that is not yours entirely, you only buy the “statement” that you own the artwork. Skeptics also emphasize that NFT is just another strategy by people who would create the most worthless things out of thin air and sell them as something magical for money.

Source: BBC, CNBC, The Verge