NFTs to the Moon 🌛
Why NFTs are much bigger than art — rise of a new dot-com era.
I’m sure you have already heard of Beeple, the NFT artist who became the 3rd most valued auction artist during an NFT auction in March 2021.
He sold his NFT artwork for $69 Million.
So -what is an NFT exactly?
Well is stands for Non-Fungible Token, or in simple terms, it's basically a “digital file” whose uniqueness and ownership are “verified on a blockchain”.
Now you probably have seen NFTs blow up in the art and music space, especially after seeing that the Kings of Leon are launching their new album through NFTs.
Their main reason the Kings of Leon claim to do this is that record labels charge big commission fees. So NFTs are a way for The Kings Of Leon to list their work online for low fees and at the same time verify which users have unique ownership over their record (think of it as automated copyright).
Okay, but why NFTs?
The genius of NFTs really comes down to 3 things:
- Decentralization — The blockchain that NFTs are held is not owned by anyone specific but by all the users. This makes it super lucrative for artists who now no longer have to argue with record labels and galleries but can sell products directly to consumers and spend less time and money.
- Distribution — One big plus of the blockchain is that it is essentially a big market. Artists no longer have to create a distribution chain but many of the existing NFT services (websites such as OpenSea) allow you to just upload a file, pay a small transaction fee (dependant on crypto used), and have your work ready to sell to people.
- Uniqueness/Automated copyright — The biggest plus of NFTs is they use existing cryptographic algorithms of blockchain to demonstrate Proof of Ownership. Now, this is huge — because now artists and art owners can verify who actually owns which artwork and directly trace back to see if the artwork is genuine or fraudulent. I like to think of this as automated copyright because artists and consumers can now easily (and automatically) verify the uniqueness and ownership of products. This basically helps verify what content is pirated and gives control back to artists.
Common NFT confusions
Okay, so one thing that is commonly misunderstood is that with owning an NFT it doesn’t mean the digital file can’t be sent to other people. So for example if I buy the Kings of Leon NFT album, I can still send the files via email to all my friends and pirate it. The only benefit of NFTs is I can show and prove that I own it on the blockchain. Essentially is it just “proof of ownership” not “enforced ownership”.
What else can you do with NFTs?
I feel like there are a few spaces where Proof of Ownership is incredibly important and NFTs and tokenized assets will quickly disrupt. This includes:
- Real estate ownership
- Certificates of all kinds (vaccine passports, university degrees, work experience, employment, proof of address, etc)
- Tickets for events
- Artwork and content
- Subscription Newsletters
- Re-sale items
The list goes on…
Thanks for reading would love to know your thoughts of interesting NFT applications in the comments!