All You Need To Know About Non-Fungible Tokens (NFTs)

Non-Fungible Tokens are one of the buzzwords that have been all over all media platforms in the last couple of weeks. Some business experts compared the hype around Non-Fungible Tokens today to that of the internet back in the late 1990s. However, there is still a lot of confusion about what Non-Fungible Tokens are, how they work, and whether they will be the future of selling and owning digital products.  

A Non-Fungible Token is a data unit on a blockchain (distributed digital ledger), representing a unique digital item. The uniqueness of NFTs makes it practically impossible to interchange them, which means one person can own each NFT at a time, thereby making them 1/1 or other numbered/limited pieces. 

Non-Fungible Tokens act as proof of ownership for any original digital product. We have all seen several copies of the famous “Mona Lisa” art piece,” but the original work is the only one that holds value. Similarly, the main idea behind NFTs is owning that “original product.” People love exclusivity; that’s why they are willing to pay hundreds of dollars for a video of something, even if that same video can be found on YouTube.

NFTs are bringing value that people attach to original products to the digital world. Artists will create a unique 1/1 copy of their pieces via blockchain and sell it to the highest bidder. Beeple, a renowned digital artist, recently sold an NFT for one of his art pieces at $69 million. 

Besides art, 1/1 digital copies have been created in many other genres. Elon Musk recently offered to sell his tweets as an NFT and received bids for over $1 million. Twitter CEO Jack Dorsey is also offering to sell the ever first tweet as an NFT, and the highest bid so far has reached $2.5 million. 

The NBATopShot franchise has capitalized on the sports world, selling digital copies of famous NBA plays to their loyal fans. When a buyer receives a play that is numbered to 50, the NBA is essentially guaranteeing that only 50 of those virtual variants exist as licensed NBA products, giving it collectible value. 

The hype and price attached to any NFT results from the value people attach to that particular product. It is a game of demand and supply, so the more the demand for a certain NFT, the more its price will go up. At the moment, the NFTs that have value are those related to digital art. One of the sites where you can buy NFTs today is OpenSea. The only NFTs that are currently being sold on this website are those related to digital art products. As NFTs get more use cases, we expect lots of new stores to surface.