Recently been so much in limelight, NFTs are gaining popularity quite rapidly and it seems like these are the future of social contracts on the internet. So what exactly is an NFT?
NFT is a non-fungible token(Didn't help... Did it?). Apart from having a name not many of us recognize/understand well... NFTs are quite cool and easy as a concept.
To understand NFT better, we first need to understand the meaning of the word fungible - which means exchangeable. Something which can be exchanged with something else of a similar value.
For eg- you have a 50 rupee bill - you can now exchange this for 5 X 10 rupee bills
The value remains similar, but the bills were exchangeable which means they lost their value in terms of uniqueness.
Even cryptocurrencies such as Bitcoin are not safe from this fungibility, even they are exchangeable, and thus the need for unique contracts arises.
So now as It defines- a non-fungible token is not exchangeable in nature - it is unique in nature and so anything unique on the internet may become a NFT.
Recently Jack Dorsey sold his first-ever tweet on Twitter for almost $2.9M.
This doesn't stop here...
Beeple sold his digital art for about $69.3M in March. This was one of the major reasons why everyone went crazy for NFTs so rapidly and an explosion of NFT 'enthusiasts' is here.
But wait what! We can replicate digital art easily right? So how this is even unique?
It's unique because every digital art is converted into a NFT by bringing it on Blockchain Technology - something you might be hearing a lot these days.
The whole process Of blockchain is a point of discussion for a whole different thread, but in easy words, blockchain tech enforces information in a chain of very small blocks that are unique in nature and have a unique sequence of arrangement for representing the information.
By getting a digital art/collectible on the blockchain, you make sure it becomes unique, and it gets a certificate of originality, which means That no one can replicate it, and you will be aware of the original version as well as its distribution.
Wait... what! Distribution?
Actually getting a collectible/art item on blockchain helps you in tagging identity - which means every time someone buys the original one, the owner will know it, as well as the transaction will be in a decentralized ledger, so it will be open to checking, and thus scams are avoided
Other than ID tagging- they also open us to the possibility of democratizing the physical assets, which means you may buy some piece of land in the USA or some other country, in a person to person social contract without any barriers(though this is just an open possibility as of now)
NFTs are based upon Ethereum, which was created by VitalikButerin when he was 19 and he found some stuff from his world of warcraft game removed by the company. He wanted to build a decentralized system and guess what?
Today people are selling and buying their IN-GAME collectibles such as unique weapons and skins in form of NFT.
The fact that NBA has started a thing like Top Shot, where you can actually own the greatest moments(clips) from the history of the competition, shows you at what level the whole NFT thing has scaled.
Probably NFTs are going to rule the modern world fandoms, social contracts, and collectibles in a way no one ever expected. The things I mentioned above were only some part of it, and to know what exactly is going on you may check sites such as @opensea for more clarity.
What do you think about NFT?
(Feel free to DM for any suggestions about the thread as well.)