The cryptocurrency world is booming. We witness hundreds of new projects with hundreds of different ideas. This new digital ledge technology is transforming every aspect of our lives. From Bitcoin to Dapps, there are different implementations of this new technology. As it turns out, NFT or non-fungible tokens are taking their turn in this new crypto world. So, what is NFT exactly? Is it a digital asset? Or is it a new form of artwork? Can we have a physical NFT? Or the entire structure is online? Let’s try to answer some of these questions.
What Is NFT?
Before discussion whether these new form of digital assets are artworks, we need to understand what they mean. NFTs are defined as unique digital assets on a blockchain that are non-interchangible. So, what does this mean?
This means the entire NFT ecosystem is powered by the blockchain ecosystem. And once they are created, they cannot be changed. This is what non-interchangible signifies. When it comes to NFTs, different blockchains can have different standards. This means Ethereum blockchain has different NFT standards than Flow blockchain. But this is a bit more technical aspect of this topic. Here, we would like to focus on understanding the basics of this new digital assets.
So, What Counts as NFT?
Well, there are tons of options. First an most importantly, digital art is the most famous form of these assets. Also, these assets can be used for GIFs, videos, games, music or even for fashion. When there is creativity, there is always room for NFTs.
Of course, like every form of art, there are not limits when it comes to non-fungible tokens. Anything can be a non-fungible token. For example, Jack Dorsey, the co-founder and CEO of Twitter, plans to sell his first tweet as an NFT. This shows that even a tweet can be a non-fungible token asset.
These assets are unique. However, there is a trick here. There can be 50 copies of an artwork (such as collectible cards) and each of these copies will be unique. On the other hand, you can have a single artwork such as music or digital arts. For this reason, the uniqueness of these assets can be a bit vague.
Early NFT Examples
Colored Coins can be given as the earliest example to these tokens. These were build on the Bitcoin blockchain. These coins had real-world value attached to them. The purpose of these coins or tokens was to redeem to to get an item or service in the physical world. However, things have changed since the first introduction of these tokens. Now, they do no represent a real-world asset but rather a digital asset.
One of the early examples is CryptoKitties. This was a block-chain based video game where you collected and breed different cats. Each of these cats were in fact a non-fungible token. It is possible to collect different kitties. And some of these adorable cats are rare. This means they value more than the ordinary cats on the platform.
NBA Top Shot offers NBA collectibles in digital asset form. This is relatively new and highly successful project. The marketplace listing includes different types of digital assets and collectibles. The community members can get these assets and collectibles.
Are NFTs New Form of Artworks?
Well, it depends. Actually, art in traditional sense will continue to exist. But it is certain that these digital assets will continue to thrive. In most cases, NFTs address to digital art collectors. And this is because these tokens are often classified as digital collectibles.
Also, there can be certain restriction of use. For example, even though you are the owner of that NFT, the creator might not give you the permission to use it for commercial purposes. So in a sense, they work like products protected under intellectual property rights.
Currently, there are attempts to link these tokens with real-world physical objects. Although this is not the main idea behind these assets, there is also no barrier to do that. Nike is working on a project called CryptoKicks which is a blochchain-based sneaker patent. Theoretically, the physical sneaker will be linked with a digital sneaker asset. But the project and the patent have not been concluded yet.
Even the celebrities and models are sharing their photoshoot in NFT forms. It is clear that these digital assets will continue to exist in our lives for a while. Still, instead of replacing the traditional artforms, they might follow their own path to create an entirely new digital ecosystem. We shall wait and see what NFTs will bring in the future.