NFT Guide: A Quick Look at NFT’s
Last March, cult digital artist Beeple sold an NFT collage for a whopping $69 million.
The collage was the first digital artwork to sell through a major auction house, with Beeple describing NFTs as the “next chapter of art history“.
Clearly, the intersection of fine art and technology can be lucrative – who wouldn’t want to make a cool $69 million to transfer some files?
Unfortunately, the world of NFTs is complex. If words like ‘cryptocurrency’ and ‘blockchain’ aren’t in your vernacular, you’ve got some catching up to do.
Never fear – we’ve prepared this NFT guide to get you up to speed. A warning, though: NFTs are so much more than digital art.
What Is an NFT?
In simple terms, NFTs allow individuals to own a digital file. If that seems confusing, you could think of it like owning an original piece of art.
NFTs operate using the same technology as cryptocurrencies: blockchain. The difference between NFTs and cryptocurrencies is in the acronym: non-fungible tokens.
‘Fungible’ refers to the uniqueness of the file.
This is important because, similarly to physical pieces of art, NFTs are unique and do not hold inherent value. As such, NFTs cannot be traded in the same way that cryptocurrencies can.
It’s worth noting that NFTs are so much more than digital art. They can take other forms such as videos, tweets, and memes.
What Is Blockchain?
Blockchain is the technology underpinning cryptocurrencies and NFTs. It functions like a database, recording, and storing information digitally.
A distinct advantage of blockchain over other data storage systems is the chronological way in which the technology stores information. Recorded data cannot be changed or hacked into. This is why the revolutionary technology is able to power cryptocurrencies so effectively – it is both transparent and secure.
Blockchain will be a technology to keep an eye on in the future. If NFT’s aren’t your thing, investing in a trusted cryptocurrency like Shiba Inu is another way to take advantage of blockchain technology. Like other cryptocurrencies, the Shiba Inu price can fluctuate. As such, it’s a good idea to keep tabs on it and purchase it at the best price.
Why Buy an NFT?
The obvious answer to this question could be answered with the question: why buy physical art?
Because you like it. Because it has cultural, and therefore monetary, value. Because you’re a collector and you want to own the original piece.
However, thanks to their purely digital nature, there is a whole range of future potential uses for NFTs and the underlying blockchain technology that go beyond comparisons with fine art.
One of these possibilities is in the gaming and looming metaverse spaces where NFTs can be used as in-game assets – the decentralised nature of blockchain could provide a safer economy for in-game markets.
The Future of NFTs
It’s likely the uses of NFTs will move well beyond the digital equivalent of owning fine art.
While the full potential of NFTs has not yet been realised, the key takeaway is that NFTs and the underlying blockchain technology have huge potential in just about every sector.
Whether investing in NFTs or cryptocurrency is the right choice for you, understanding blockchain is a great place to start the journey.