What is NFT and how non-fungible-tokens work

Digital art is a subject that still causes confusion in many people. After all, what is the value of an art that can be replicated with two clicks? While it takes hours (or days) to copy a painting, creating a copy of a digital art requires no effort. How can we guarantee that this work of art that exists only as pixels – and, in a deeper analysis, only as data – is really exclusive and original?

NFT: What is it?

This is where crypto art comes in, a digital art with a unique code attached, guaranteeing the owner that it is unique and exclusive. Even though it can be copied countless times, only the original has this code. Or, if the artist wants to sell all copies, he can insert codes on them, and each one will have a unique “mark”. This guarantees buyers that even the copies are exclusive, such as numbered editions of an art sold to collectors, for example.

This is the basic concept behind Non-Fungible Tokens, or just NFT. In a very short way, an NFT works as a code, which is linked to art, so that people know that it is original, unique and exclusive (like the Mona Lisa). For this, the NFT is based on blockchain – the same base used in cryptocurrencies like bitcoin -, which guarantees some advantages, especially when the art is commercialized.

Available blockchains

Currently there are several blockchains available, to be used for the most diverse purposes, however, Ethereum was the one that became most popular for the NFT. One reason is that it has its own cryptocurrency, Ether (ETH), facilitating transactions. Even so, it is possible to make purchases with other cryptocurrencies and even with credit cards.

The advantage of this format is that the NFT can always be linked to the original creator or owner. If a buyer decides to resell the work in the future, the artist responsible for it may receive a portion of the amount (provided the transaction is made on the same platform as the original sale). In other words, the NFT guarantees, in addition to exclusivity, that digital art is not pirated.

Who can use NFT?

The world's first tweet went on sale using NFT.The world’s first tweet went on sale using NFT.Source: Twitter / Jack Dorsey

The advantages of NFT have become so interesting for artists who create their works digitally, that its use has gone beyond the world of art. A very unusual example, but one that shows how there are no limits to the NFT, happened on Twitter. In early March 2021, Jack Dorsey, Twitter’s CEO, put the social network’s first tweet up for auction, and to make sure it was original, the NFT was used. The purchase was made by a user who paid 1,630 Ether, the equivalent of $ 2.9 million.

Another person who decided to take advantage of the NFT to sell something on the internet was the CEO of SpaceX and Tesla Motors, Elon Musk. He decided to create a song on the subject, and put it up for sale using NFT. He didn’t set a price, but he caught the eye of a person who has become quite famous in recent weeks thanks to the NFT: Mike Winkelmann, better known as Beeple.

NFT value

Collage sold for more than $ 69 million.Collage sold for more than $ 69 million.Source: Instagram / Beeple

Beeple works with digital art and, since 2007, has published a different image every day on his Instagram. On March 11 of this year, he made a collage with the arts made in the first five thousand days. Entitled Everydays – The First 5000 Days, it went up for auction, after being registered with NFT, and sold for more than $ 69 million.

It is important to remember that the value of a digital work of art is influenced by several factors, just as it is with a physical work of art. The artist’s fame plays an important role in the final value, however, details such as interest that art generates and exclusivity are also important.

As it is something new, the NFT attracts the attention of enthusiasts and collectors, but that does not mean that digital art has more or less value than any other type of art. Its value can vary from one day to the next and what the NFT guarantees is only the exclusivity of this work.

In addition, even preventing piracy, the NFT does not prevent the theft of digital art. If a person decides to place an NFT in a work (a tweet, or anything digital) that does not belong to him, it will not be possible for its creator to claim authorship. This causes the original work to be offered for sale by a person who did not create it and is paid for it.

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