The internet shook after an NFT artwork by Beeple was sold for $ 69 million. Why did a 302 MB file cost this much? What is the NFT craze, and what role does blockchain have to play in this?
If these are the questions you want answers to, then you have come to the right place. In this article, we will tell you everything that you should know about NFT. Let’s get started without further ado.
What is Blockchain?
When the internet fell short on addressing issues like trust and disintermediation- Blockchain came into the picture.
A blockchain is a software network that serves as a digital record as well as a system for transferring assets securely without the use of a third party. No one can change or reverse the records on this decentralized ledger.
Blockchain’s basic data structure, also known as a Merkle tree or Hash tree, makes this possible. In this data structure, each node has a unique hash code that contains the information of the parent node. Hence, all the nodes up to the root node can be traced back easily.
Thus, it provides immutability and irreversibility, making blockchain a powerful technology for safeguarding data and information. It is much safer than maintaining online records that anyone can hack or alter. However, in the case of a blockchain, the hacker would have to exploit each block to accomplish his mission, which is practically impossible.
What is NFT?
NFT stands for non-fungible tokens. A non-fungible token (NFT) is a data unit kept on a blockchain that guarantees that a digital asset is unique and thus not interchangeable.
You must be wondering what fungible is in the first place, right? Consider this example- Bitcoins are fungible, which means that each one has the same value and function as the coin. So, if you have a bitcoin trade, you can exchange one bitcoin for another, and you will not disregard the terms of that agreement.
On the other hand, each NFT token is digitally unique and has a number attached to it. It is the metadata and these unique identification numbers that make each NFT different from one another. Hence, if you try to replace it with another one, this will result in an inconsistency in the blockchain, and you will get noticed.
NFT consists of various unique assets like photos, videos, audios, gifs, birth and death certificates, collectibles, deeds of property, and identities of objects on IoT. Basically, anything that you can represent digitally can become an NFT. However, you must note that if you buy the NFT, you do not buy the asset; instead it just acts as a record of ownership.
You can track NFTs on blockchains to give proof of ownership of work. However, anyone on the blockchain can access the duplicates of the original file.
NFTs Influence on Art
Artists may now use blockchain technology to register their digital creations and convert them into secure sellable assets, thanks to the emergence of NFTs. The digital asset receives a unique cryptographic serial number when the original digital piece of art is locked into the blockchain, giving it the original form of provenance or ownership.
How NFTs Work
Each NFT exists on a blockchain, mostly on Ethereum. When you purchase an NFT, you are basically purchasing a digital record of a token’s ownership that you can later transfer to a digital wallet. You can find a record of this unique identity or ownership in the blockchain ledger.
The sale and purchase of NFT become a part of the blockchain, and the buyer gets the rights to own the original artwork but doesn’t get the copyrights.
What is NFT Marketing?
One of the frequently asked questions is how does an NFT gains value. Well, it depends on the marketing of the NFT project. A popular NFT project will have better sales as compared to a project that is more appealing but not well marketed. Hence, the better the marketing, the higher the value.
It is best to build a community and increase community engagement via social media marketing and content marketing. Although there are other ways to market NFT projects, the ways mentioned above give the best results.
What is NFT Craze?
Consider the case of Beeple’s Artwork. It was a graphic painting by Mike Winkelmann. The buyer bought the token that gave him the right to own the original artwork for a whopping $69 million. That is a huge sum of money. In fact, it is $ 15 million more than Monet’s Painting Nymphéas.
The question is, why would someone buy an artwork just for the sake of ownership at such breathtaking rates? Well, if you think of it rationally, the motive is quite simple- get the ownership of the original artwork and sell it at a higher value when it gains popularity.
Will NFT Change Art?
There are conflicting opinions regarding this matter. Some argue that art has been a tangible thing that is both immutable and irreversible – there is only one original Mona Lisa after all. On the other hand, some see NFTs as the future of art that can bring about a big change.
However, the future of NFTs majorly depends on how the artists welcome them. As of now, NFTs are quite appealing to artists, singers, and other performers because they provide sole ownership. Hence, we can assume that NFT can change the course of Art.
Having access to something that no one else could ever have without the owner’s decision to copy it is the key reason why NFTs are appealing.
Moreover, blockchain is gaining popularity, and hence there is a high chance that NFT will stay as a way to prove ownership.
Blockchain is more than just a technology; it is a concept that applies to different industries and sectors to create a chain. It revolutionizes everything- from the way the financial industry works to the course of purchase of art via NFTs.
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