You have probably heard about the first tweet being sold for $250k, or Grimes who sold $6 million worth of digital art as NFTs ? Is the world getting crazy with Covid19, or does the cryptocurrency community have lots (really lots) of money to spend ? Or what’s really happening exactly ? NFTs or Non-fungible token are a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens, that are fungible in nature.
Basically you can exchange a bitcoin with another one, you can exchange a bar of gold with another bar of gold of the same size, but you cannot exchange an NFT with another one. It’s designed to be unique, when you buy an NFT only you own it, but wait you are not buying a digital product, you are just buying the digital rights to it !
Rasmus Lerdorf, creator of PHP, still didn’t get the picture behind NFT. He tweeted :
Do you think it will be a good idea ? Someone out there is interested into buying the rights for version 1 of PHP and how much does it worth ?
What’s the idea behind NFT ?
The idea is simply like if you want to support an artist, you buy his or her work ! But if you want to support a digital artist, you cannot buy a picture, but you can buy instead a digitally signed one that confirm the authenticity of the picture and the ownership. So the picture anyone can still download it and use it. But only you own it ! Which still very vague unfortunately.
Actually millions of dollars are being spent on this new technology. Rodriguez-Fraile, the guy who sold the 10s beeble video for $6.6 million, explained that “anybody can took a picture of Monalisa but it doesn’t have any value, because you don’t have the provenance or the history of the work.”
Actually there are many marketplaces to buy and sell digital artwork with NFT, like OpenSea where you can trade Ethereum ERC721 and ERC1155 assets. Or you can use 0xcert API which provides an open source implementation of ERC-721 non-fungible token.
Read more about NFT token on Wikipedia https://en.wikipedia.org/wiki/Non-fungible_token
