Are NFTs The Next Big Thing or Just Another Brick in The Wall?
NFTs are the currency of art forms. For instance, if you have created an image or any form of digital art, you can have it copyrighted and sell it off to make money. You will have the token of ownership which could then be bought and sold. That is the essence of NFTs.
With yet another segment of assets emanating out of blockchain technology, it is beginning to provide us with glimpses of the full potential of this unique feature of the modern world. NFTs (Non-Fungible Token) is a virtual currency that resembles some idiosyncrasies of crypto currency. The unique element of NFTs is that they could only be traded with another NFT. NFTs are the currency of art forms. For instance, if you have created an image or any form of digital art, you can have it copyrighted and sell it off to make money. You will have the token of ownership which could then be bought and sold. That is the essence of NFTs.
Examples of some famous NFTs
It is the ultra-modern way of trading art, particularly, visual images in the form of Gifs, PNG Images, Memes, Digital Art including Music, etc. As a matter of fact, the “Side-eyeing Chloe” image of a young girl was sold in an auction for thousands of dollars. There are other incredulous examples like the Gif of Nyan Cat that was auctioned for $500,000, Grimes sold his music in a digital form for more than $6 million, a record-creating $69 million worth of NFT was sold by digital artist by the name of Beeple. There are a plethora of such examples and they are only rising in number with each passing day. This gives one a perspective of where the industry is heading and the kind of popularity the NFTs are generating. But the real question is, whether it will sustain or not?
Also read – What are NFTs? Why has it created a lot of buzz in the financial markets?
Are NFTs sustainable?
As is the case with every new technology, there are divided opinions among the industry experts. It is not easy to evaluate something we know so little about. This is especially true in today’s era because technological advancements give rise to many new ideas almost every day. One can’t ascertain if this idea could actually be disruptive enough to consider it as a serious investment opportunity. Many people are of the opinion that art can’t be sold online and must be experienced and absorbed in person. The physical sensation is necessary to buy an art piece. But then there are those who believe in the idea of digitising everything. This is the modern generation which is also termed as the “digitally native people”. For them, Digital is the only way to experience everything.
Challenges with NFTs
The NFTs come with its own set of unique challenges. Apart from the usual issue with the acceptance, there are some fundamental problems as well. For instance, digital space is not bereft of the phenomenon of theft. One can easily copy the image and produce replicas of it. Although there is a token of authenticity which the owner will possess, there could still be chances of people replicating it and generating money from it. Then there is the situation with the currency to trade NFTs in. Being based on the same blockchain technology as the crypto currency, people already associated with the crypto are primarily the ones who will be more inclined towards going for the NFTs too. For everyone else, who is still figuring out the economics of the crypto world, NFTs are almost light-years further to comprehend and have the confidence to invest and trade in.
With this article, we hope that you got the basic mechanism of what NFTs are, how are they traded and what are the challenges in the adoption. One thing to mention here is the fact that we are all at a very nascent stage of blockchain technology, in general and NFTs, in particular. Hence, it is advisable to keep a close eye on the development of this segment in times to come.
Also read – India is set to become one of the biggest players in the cryptocurrency world.