Suppose you are a creator and you created something, whether it is art or music or a video. You then decide to put that online.
Now you are at a risk here, because anyone on the internet can forge or copy this work of yours.
So what can you do to prevent this?
Let’s look at another case.
The original copy of Leonardo DaVinci’s “Mona Lisa” is displayed at a museum in Paris. Let us say I get a copy of the painting and display it in my house.
Also, I say that this is the original. How can you say which one is the original painting?
Or even the painting in that museum in Paris is the original one or not? Just kidding.
So what can we do to prevent these.
The answer is NFTs or Non Fungible Tokens
NFTs are digital tokens or rather certificates that validate authenticity.
You may have heard of paintings, pics, and gifs sold on the internet for millions of dollars.
But what is this NFT and why there is a lot of perceived value around these digital assets? And if so, is it actually worth millions?
NFTs can turn digital assets into one of a kind by using a digital signature that defines the ownership of the asset.
It can also be traded for real money, cryptocurrencies, or even NFTs.
For understanding, this further let’s look at what fungibility is.
Say, that you have a 100-dollar bill you can exchange this bill for five 20-dollar bills. The value remains the same. This is fungibility.
That when an asset can be exchanged or substituted with similar assets of the same value it can be considered fungible.
The painting of the Mona Lisa cannot be fungible because it cannot be exchanged for the copy of it hanging on my wall.
Because the original painting has a greater value.
Similar is the case of NFTs in the digital world. every NFT is unique and cannot be exchanged for another NFT.
Ethereum is just like any other cryptocurrency in terms of underlying technology but they are unique.
NFTs use blockchain technology to create digital certificates for digital assets that live in the blockchain ledger.
These digital certificates have information regarding the owners of the NFT and when it was sold.
All these technologies together help in solving the problems discussed in the introduction of this article.
That is, how to make your work scarce and enhance its value and how to verify the authenticity of an asset.
This doesn’t mean that NFTs can be copied but can be easily distinguished from the original because of the digital certificate in the blockchain.
NFTs can also have smart contracts attached to them which can give a real-world utility to the tokens. For example,
Entrepreneur Gary Vee created Vee Friends, his NFT collections with smart contracts.
This token will give you access to his VeeCon event and even spend time with him or get on a video chat with him.
All this increases the value of the NFTs in his NFT project.
This is just an example of NFTs being applied to games, sports (eg NBA) and digital arts, etc.
NFTs can be an integral part of the digital economy in the future. Maybe the next plane ticket that we buy would be an NFT or we could open a restaurant run on NFTs.
Possibilities are endless.