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Recently, a lot of attention has been paid to Non-Fungible Tokens (NFT). But what is it? And why are they being traded for millions of dollars?
Traceability issue
Art such as painting and sculpture has always been extremely collectible. The cost of a work of art is usually calculated based on the artist and whether it can be confirmed that the work is the original. Art historians and experts can spend hundreds of hours evaluating a piece of art to verify its authenticity.
But in the age of the Internet, when digital art can be copied indefinitely, how can you check which version is the original? How can you trace a file back to its creator?
Smart contracts and NFT
We sometimes write about cryptocurrencies. All of them, from Bitcoin to Ethereum, are built on a technology called blockchain.
Blockchain is used to monitor and verify digital transactions. But in the case of Ethereum, the technology has gone far beyond the cryptocurrency and includes so-called "smart contracts" - and this is where non-fungible tokens (NFT) come in.
Using a smart contract, digital art owners can create their own unique NFT, which is stored in a decentralized blockchain ledger. This special token is indivisible, non-counterfeit and indestructible, stored in the owner's digital wallet. And once created, these non-fungible tokens can be bought and sold - just like the real picture.
What about copyright?
Perhaps the most famous NFT so far has been the one assigned to the legendary Nyan Cat video. When the Nyan Cat NFT was put up for sale, it was bought for 300 Ethereum coins, ie for about $ 600,000.
So, does the owner of this NFT now own the copyright for the Nyan Cat video? No. He simply owns the picture, whose originality is confirmed, and the accompanying social prestige. The owner can claim to own the “original” image - even if it exactly matches the millions of other copies available on the Internet, they still have the original, not a copy.
And if the digital artwork continues to maintain its value, the NFT can be sold or auctioned just like a real painting. It is possible that NFTs will become another popular investment.
Anyone can buy NFT?
Yes, anyone can buy and sell non-fungible tokens and related artwork. All you need is a digital wallet that stores the Ethereum cryptocurrency. You can then start adding digital art to your collection using one of the many NFT marketplaces like OpenSea or Rarible .
But, as with any cryptocurrency-related transactions, you should always remember:
Traceability issue
Art such as painting and sculpture has always been extremely collectible. The cost of a work of art is usually calculated based on the artist and whether it can be confirmed that the work is the original. Art historians and experts can spend hundreds of hours evaluating a piece of art to verify its authenticity.
But in the age of the Internet, when digital art can be copied indefinitely, how can you check which version is the original? How can you trace a file back to its creator?
Smart contracts and NFT
We sometimes write about cryptocurrencies. All of them, from Bitcoin to Ethereum, are built on a technology called blockchain.
Blockchain is used to monitor and verify digital transactions. But in the case of Ethereum, the technology has gone far beyond the cryptocurrency and includes so-called "smart contracts" - and this is where non-fungible tokens (NFT) come in.
Using a smart contract, digital art owners can create their own unique NFT, which is stored in a decentralized blockchain ledger. This special token is indivisible, non-counterfeit and indestructible, stored in the owner's digital wallet. And once created, these non-fungible tokens can be bought and sold - just like the real picture.
What about copyright?
Perhaps the most famous NFT so far has been the one assigned to the legendary Nyan Cat video. When the Nyan Cat NFT was put up for sale, it was bought for 300 Ethereum coins, ie for about $ 600,000.
So, does the owner of this NFT now own the copyright for the Nyan Cat video? No. He simply owns the picture, whose originality is confirmed, and the accompanying social prestige. The owner can claim to own the “original” image - even if it exactly matches the millions of other copies available on the Internet, they still have the original, not a copy.
And if the digital artwork continues to maintain its value, the NFT can be sold or auctioned just like a real painting. It is possible that NFTs will become another popular investment.
Anyone can buy NFT?
Yes, anyone can buy and sell non-fungible tokens and related artwork. All you need is a digital wallet that stores the Ethereum cryptocurrency. You can then start adding digital art to your collection using one of the many NFT marketplaces like OpenSea or Rarible .
But, as with any cryptocurrency-related transactions, you should always remember:
- The value of cryptocurrencies and NFTs is constantly changing, so your artwork may lose a significant portion of its value. But over time, their price can rise dramatically, which can bring serious profits.
- Your digital wallet looks like a real one - if it gets stolen or hackers get hold of your passwords, they can steal your NFTs.
