NFTs
Are NFTs dead?
For most people, non-fungible tokens (NFTs) are those weird, often abstract, and (they think) ugly pieces of digital art that sell for thousands of dollars, if not more. On the surface, this seems about right. Strange digital artworks of monkeys, dogs, cats and other abstract images are selling for big money. To be exact, they are priced in cryptocurrencies such as Ethereum, Solana and, more recently, Bitcoin.
But are NFTs just about digital art?
On the contrary, NFTs are more like digital certificates of ownership than the art itself. When you purchase an actual physical painting, you may receive some type of certificate from Sotheby’s or Christie’s that you purchased or won the painting from them at auction. Or you could have purchased the actual painting at an art gallery. In any case, there is usually official documentation that accompanies the painting to prove that you are the current owner.
So think of NFTs this way; you are purchasing the digital certificate of ownership of that work of art that proves you are the new owner.
NFTs are different from cryptographic tokens. Cryptographic tokens like Ethereum and Solana all have the same price at any given time. So, for example, if the spot price of Ethereum today is $2,000, then everyone who owns Ethereum has the same spot price today.
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Not so with NFTs. Just like a particular house, car, watch or work of art has its unique price, so does each NFT. So a Banksy NFT that is a unique digital artwork might be worth $500,000, but that price is specific to that specific NFT. An NFT from unknown artist Joe Smith might sell for $100, but it is specific to that NFT or NFTs in that collection.
It’s important to remember that NFTs are actually digital certificates of ownership. So in the future, if a jurisdiction allows it, the title to a property could have a paper certificate and a digital NFT that you need to own to be called the owner of that land.
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NFTs track provenance or the sequential chain of ownership. Because the NFT is on a blockchain, a buyer or seller can see who previously owned that asset (represented by the NFT), who sold what and for how much, any modifications to ownership (if tracked), and everything the NFT was designed to do. track back. . It then makes it easier to establish provenance. The web blockchain explorer would show that the asset was owned by Bob, then sold to Susan, then sold to Luther, and so on.
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Larry Fink, CEO of asset management firm Blackrock, see a future where many of our transactions involving asset transfers are done on the blockchain. It is a good way to mitigate – if not eliminate – fraud and false certificates of ownership, since the provenance is in the chain and cannot be falsified.
NFTs are definitely alive. It’s more than just digital images of monkeys, dogs, cats and other fun animals. On the contrary, some of our future transactions involving our key assets and possessions, such as physical art or land, may involve holding the NFT of that asset to prove that we are the owner.