What is a NFT?
NFT stands for a non-fungible token. When broken down, fungible means something that can be easily interchanged with similar counterparts. The most obvious example is money; you can change one £20 for two £10s to give you the same item. Non-fungible means it is impossible to interchange with an identical counterpart, but in simpler terms, it is one of a kind.
The easiest way to understand them is by comparing them to other non-fungible items like a one of a kind Tony Hawk signed skateboard deck. You can trade this for another Tony Hawk board but not for another of the same as it is unique.
So now we have a better understanding of what non-fungible means, let us delve into its meaning when talking about NFTs. With a skateboard deck, as an example, it is clear that you are the owner of this asset; however, digital art can be copied countless times, so NFTs ‘tokenise’ the artwork that defines the ownership. There are people that think NFT’s hold no value because it’s possible to right-click the image and save a copy. However, does googling an image of Picasso make you the owner of a multi-million dollar piece of art history? Owning the verifiably real thing will always have more value than not.
These unique digital assets can be bought or sold. They work on the Ethereum, Tezos and Solana blockchain (mainly), which, apart from its primary job of creating coins, can also carry out several different protocols, including creating NFTs. These get stored on the blockchain and are immutable.
How does it work?
So how it works is you create your one of a kind digital asset, whether that be a digital artwork, a meme, gif or tweet as some examples. Then you ‘mint’ it on the blockchain of your choice, which creates a unique certificate for it. This then gets sold so that the buyer is the official owner of that asset. It must be noted that the artist can still own the copyright and production rights to the asset.
Are they worth the squeeze?
NFTs have been very popular over the last year but will this continue? It is difficult to know as the general public might get bored of them, but communities within the NFT world are still just as fanatic as they were when they first came out. I think it depends where you stand in the NFT world. Are you an artist looking to sell your digital art (loads of websites easily mint your artwork for a small fee, of course), are you a buyer or an investor looking to make money down the line. Whichever you are, do your own research and, with all investments, only spend what you’re willing to lose.
Where can I buy NFTs?
You can buy NFTs on a number of different sites including:
