NFTs: The New Bedrock Of The Virtual Economy
From digital designs, digital art, video clips to tattoos, and even tweets, NFTs are radically transforming the world of digital ownership.
Non-fungible tokens (NFTs) may be a buzzword right now, but they’re a revolution that’s here to stay. In their simplest terms, NFTs are the evolution of digital assets and ownership in an online-only and heavily tech-dependent world. Because NFTs are listed on a blockchain, they are more secure -in some ways- than physical assets. They cannot be traded for an identical item and can retain their value and use for the creator in perpetuity. From digital designs, digital art, video clips to tattoos, and even tweets, NFTs are radically transforming the world of digital ownership.
What’s the fuss about, really?
Let me explain it in simpler terms. Consider the difference between currency and a painting. If I give you a US$1 note, I can get an identical $1 in return, but if I were to trade in a painting I owned, I wouldn’t get an identical painting back from you. That’s because a painting is a non-fungible item, and is valued accordingly- there’s only ever the one. A copy is never going to rival the original in value or quality.
Now, in a digital marketplace, much like in a physical marketplace, assets have value, but they can be replicated with greater ease. That doesn’t mean people shouldn’t own digital assets or they aren’t a worthy investment.
That’s where NFTs come in as distinguishable digital possessions that identify ownership through an untamperable blockchain ledger. It’s what’s making the NFT marketplace something of a future-oriented collectors and content creators’ paradise, with digital assets being valued in multimillion-dollar deals.
As the cryptocurrency marketplace opens up new and exciting avenues of online transactions, NFTs are giving broader representation and recognition to digital artists, content creators, and producers of online things.
But, is it safe?
I get it. You’re still not convinced, and you have questions. Maybe it feels a bit like the early days of credit card use for online transactions but look at where we are now! So, let me say this simply- NFTs are just (another) technology that underpins digital projects making them safer and securer.
Nowadays, as people are getting their heads around NFTs, the hype is not (so much) about the technology but instead around specific projects.
CryptoPunks and Axie Infinity are two notable NFT projects drawing lots of positive attention. Axie Infinity is an NFT-based video game where each character is a collectible digital asset that can be bought and sold. CryptoPunks, on the other hand, is the largest and perhaps the most widely recognized digital art NFT project. Some CryptoPunks images are valued at over $10 million and are a testament to the investment potential of NFTs.
What about the critics?
Here’s the truth- you only fear what you don’t understand, so do your research.
While the tech is secure and here to stay, NFTs and their uses are evolving. As a potential investor, you need to be careful about where you’re putting your money. Just as physical marketplaces imbue value onto certain items—collectors and investors spend millions on original artworks—the same rule holds for NFTs. Owning a copy is not the same as owning the original.
As with anything in life, there are cheats, liars, and vilifiers but NFTs aren’t the villains here. Living in a digital world, the demand for digital artwork is on the rise. NFTs ensure digital authenticity and uniqueness by turning digital art into a real-world asset. As a plus, they can become a constant source of income for their owner every time they are used. Moreover, NFTs hold huge potential on account of the ease in identifying provenance. As NFTs are on the blockchain, tracing and verifying authenticity takes mere seconds.
Where are NFTs taking us?
NFTs are nurturing artistic talent and imagination in new and awe-inspiring ways. Artists and content creators are making digital art, games, design, and much more while earning recognition and an income.
While the NFT marketplace is evolving with many opportunities still to be discovered, the traceability of NFTs implies many cross-over functions into traditional areas like law and politics, among others that make information, content, and all things art immune to tampering, physical loss, or accidents. It’s a level of security and traceability that’s unparalleled anywhere—physically or digitally!
As the bedrock of the digital economy, NFTs are just getting started. Things will get really interesting as they evolve into bigger and broader use cases. Here on, there’s no looking back and whether you choose to capitalize on making a timely investment into something that has real value in the future is entirely up to you.
Look out, world- we haven’t seen anything yet!
Tahem is a fintech enthusiast, podcast host, and digital native. He is also the CEO and co-founder of North Loop, a global financial services platform that offers borderless banking and investment services to NRIs, and Mesha, a social investing platform where users can invest in stocks and crypto and participate in challenges for real money.
Having grown up in the millennial and Gen Z era, Tahem has a strong understanding of modern youth culture and breaks down complex concepts of the fintech industry into bite-sized bits in order to educate and inspire.