NFT systems are one of the hottest digital trends in the last year. Used by artists and musicians, but also by companies, some NFTs are today sold for large sums of money. Do you want to know what exactly is an NFT, how is it used and what is its potential in the future?
- What does NFT stand for?
The term NFT comes from “non-fungible tokens”, which can be translated as “non-consumable assets”. It refers to a digital asset that represents a real object such as art, music, videos or objects within video games. NFTs are bought and sold online and generally refer to unique and unrepeatable objects, or at least they are available in a very limited way, and usually have unique identification codes.
- Origin of NFT s. The first NFT was created by Kevin McCoy in May 2014, and it was called “Quantum”. He revolutionized the digital art market by putting up for sale a unique digital archive that is valued at $7 million today. Although the reproductions of are available on the internet, only one person (the buyer) has the original file, generating a unique value for him. Thus, NFT systems have been on the digital market since 2014, but have gained notoriety in recent years by becoming an increasingly popular way of buying and selling art. Today, around 30,000 NTFs are created every day, generating a value of around $60 million, according to NFT Stats.
- What is an NFT system for? NFT systems allow artists and creators to sell their creations and monetize their content. This, in turn, is possible without the need for intermediaries such as art galleries or auction houses, generating a democratization of sales. In addition, they allow digital content to be monetized and, as an additional advantage, the artist can program the NFT so that, whenever it is sold, they receive a part of the payment, following the royalty system. At the same time, for the buyer, the NFT gives him possession of a product that is unique and cannot be copied. Thus, while the copyright remains in the hands of the artist, the buyer is the only one who has access to the original work. In a certain way, it happens in the same way as with the original pictorial works.
4. How does an NFT work?
NFTs are primarily part of the Ethereum blockchain, although they may appear in other blockchain systems. Simply described, a blockchain consists of a kind of public account book that keeps track of digital transactions and, ultimately, is what allows the exchange of cryptocurrencies and tokens. Regarding its operation, NFT systems are created from digital objects (which can be tangible or intangible) and can include everything from art, to GIFs, videos, digital avatars or music files. There have also been cases of tweets being sold as NFTs. For their part, brands can use NFTs to mark their content as their own, preventing theft or copying. In the marketing arena, several companies have already rolled out NFTs for their customers. Examples of this are Taco Bell or Pizza Hut, which gave their fans the chance to buy a taco or a pizza, respectively, in digital format. The disadvantage is that they cannot be eaten; the advantage, which will last forever.