Non-Fungible Tokens (NFTs) — What are the Crypto bros on about?
What do they mean?
Non-fungible Tokens (NFTs) are all the hype online right now. While cynics think they’re a pipedream for the average Twitter user who got lucky, the data says otherwise.
But firstly, what does NFT mean? To get to that we need to understand what the term ‘Fungibility’ means and really, it’s not that complicated.
Take a 10 Rupee note for example, when you exchange your 10 Rupee note with someone else’s, there is no net value change on either side, a 10 rupee note is a 10 rupee note is a 10 rupee note. This is called the note’s Fungibility.
So Fungibility is the property of a good or commodity (money) which allows a unit (one 10 rupee note) of the commodity to be interchanged with no change in value involved (10 Rs = 10 Rs).
Now that we’ve got that done, let’s talk about Non-Fungible Tokens.
Given the definition of fungibility earlier, you should have a rough idea of what an NFT is. So NFTs are tokens (goods or commodities) that are NOT interchangeable with any other NFT. Yes, they’re all unique and usually cannot be exchanged or directly traded without affecting the net value involved.
Okay that’s what they mean. But what are they?
Great question. To put it simply, an NFT can be anything in the digital world. That’s right, anything. They range from digital art to weird photos of cartoon apes to music tracks, to items within video games and so much more.
The most common response when these are mentioned, especially for digital art and cartoon apes is “I can literally right click and save the image, what makes an NFT special?”.
This is where one of the most fundamental properties of an NFT comes in. The uniqueness and the verification involved.
So running with the response above regarding taking a photo of art or saving it.
Imagine you visit the Louvre, you see the Mona Lisa in all her glory, you take photos on your phone, it’s recorded that you’ve seen it. But do you own the Mona Lisa?
Nope. At this moment the Louvre (technically the French Government) does. That’s what makes NFT art so attractive to collectors. Every NFT ever minted (made) is issued a unique identification number on the blockchain (a decentralised platform) that it’s released on. Meaning nobody can copy it and nobody can claim to own it apart from the registered owner themselves.
So from what I’ve read so far, NFTs are only for yacht-owning collectors?
Nope. It does pander to the whales as well but the core principle of NFTs is that it’s all about community.
If you’re a creator, you can put your artwork on sale as an NFT and sell it to potential buyers directly with no middlemen and nearly no operating cost involved. If people like the work you’ve put up, they can buy it from you using cryptocurrencies on markets like Opensea, Rarible, Nifty Gateway, etc.
If you’re someone who wants to purchase art, you can directly support your favorite artists by buying their work plus truly own something that can be flaunted online, backed up by a blockchain entry of your transaction.
That does make sense, but I heard something about apes and more stuff about Jake Paul and kittens?
Alright to set things straight, some NFTs are quite…. out there. Addressing the elephant in the room first, Jake Paul released his Youtube videos (yes) and Pokemon cards of himself for up to 20,000 USD (Trust me we’re as surprised as you are but hey, to each their own).
The Bored Ape Yacht Club, Cryptokitties, CyberPunks and few more are communities that house rare and highly sought after tokens which have been sold at prices upto a cool 11.75 Million USD. Million, correct. A couple of the rarest ones haven’t even been sold yet so that benchmark could very well be surpassed soon.
But NFTs are not all fancy collectibles with rarity value.
“Save Thousands of Lives” a piece created by NooraHealth to raise money for new mothers and families in South Asia and training patients’ families to take care of them after they leave the hospital raised 5.23 Million USD at a charity auction. Rest assured, this will definitely be put into good use to raise the welfare of all those involved.
Edward Snowden’s “Stay Free” sold for 5.4 million USD, all of which went on to help the Freedom of the Press foundation which he is the president of.
So is there some potential for NFTs to truly make a positive difference in the real world?
Absolutely. Decentralization of control and finances do worlds of good for people in various industries including game developers, musicians, artists, etc.
The minimal operating costs provide an opportunity for anyone to make it big should they have the talent, as the great Chef Gusteau said, “Not everyone can become a great cook, but a great cook can come from anywhere” and this is exactly the kind of platform that NFTs are looking to build for the community.
Thank you, but I think I’ve read the word NFT enough times today…
We don’t blame you one bit, it is a lot of information to take in. Just wanted to spread the word that there is a lot more to NFTs than just the memes that you come across on social media. They’re here to make a difference. The positive influence they can have on the world is there for all to see and quite a few to feel already too.
