NFT is one of the most popular terms in technology (and not only) in recent months. We keep hearing about someone buying NFT and someone selling something like NFT there. It’s time to ask, what is NFT anyway?
Increasingly, we hear about shockingly high amounts on the Internet for the right of a celebrity to own a body part or a work of art, or even digital love. Paying large sums of money for something intangible and incomprehensible, to put it mildly, seems strange to the villagers. NTF is shocking and gaining popularity. But is it really that weird? Can you make money on NFT? What is NFT? let’s check.
What does NFT mean?
Let’s start from the beginning. NFT is short for a non-fungible token, we can translate it as a non-convertible, non-transferable token. To understand this, it is good to compare the convertible and non-convertible tokens. Let’s use some examples to understand the difference between non-convertible and convertible tokens.
Convertible tokens can represent money, which can generally be exchanged and therefore exchanged and transferred. For example, every 5 zlotys coin has the same face value. If we have a 5 zloty coin, we can exchange it for another and still have the same amount of money. There are innumerable coins of the same 5 zlotys in the world, and the nominal value of each of them is equal to 5 zlotys.
The best example of an inseparable and unchangeable object will be a unique, original work by the artist, such as Edward Munch’s “Scream”, Van Gogh’s “Sunflowers” or Leonardo da Vinci’s “Mona Lisa”. Although each of the world’s most famous paintings has received a large number of reproductions, there is only one original for each work, each of which is valued at a large sum.
What is NFT?
It is a digital document stored in the NFT blockchain. This is a certificate confirming that the file is available in only one copy and that it is genuine. Of course, users can have copies of it on the Internet for download, but first, the original file is only one.
NFT tokens are entries in a blockchain network that contain individual identifiers. You can copy, save, and copy previously known files on the Internet. NFTs cannot be copied and can only be transferred between users’ virtual wallets.
One of the first world-famous NFT deals in 2021 was the sale of Mike Winkelmann’s Everydays: The First 5000 Days digital art by Christie’s. Indian investor Vignesh Sundaresan for $ 69 million. received an NFT token confirming the authenticity of the case and its ownership.
In the real world, when you buy a work of art, you get a title deed on paper. What does a work look like when it is created in a virtual world and has, for example, a graphic or 3D model or a digital sculpture? Then NFT works, because by buying it, the buyer is determined as the owner of the purchased work, and anyone can check it in the blockchain network.
Having NFT does not necessarily give you the right to have an original job.
How to trade with NFT?
NFT trading, like cryptocurrency trading, is carried out through a blockchain network. Information on NFT transactions, buyer, seller, transaction amount is available. However, the NFT mark cannot be copied or copied without the consent of the owner. NFT tokens are the fastest growing in the digital art market. Today, virtual works of art with NFT certificates are offered by the most prestigious auction houses, such as the aforementioned Christie’s or DESA Unicum, and the volume of dizzying transactions is no longer as shocking as it was a year ago.
However, NFT is not just about virtual art. Tokens are also used successfully, for example. Identification of collectors and exclusive items such as designer bags and luxury cars.
NFT and legal regulations
The oil industry is growing rapidly, and as is usually the case, legal arrangements will have to wait a while. According to Nonfungible.com, the turnover of the son of NFT has already exceeded 17 billion US dollars, which, of course, increases the interest of lawmakers in this market. To avoid the risks associated with oil operations, individual countries want to introduce or are already beginning to apply rules aimed primarily at improving the security of cryptocurrency trading. The regulations should focus, for example, on intellectual property rights, money laundering and terrorist financing operations, or the application of a license requirement for intermediaries. The vast majority of countries have not yet established rules for crypto assets, including NFT, and comprehensive regulation of this issue will be extremely difficult due to the constant development of new technologies.
NFT and copyright
Acquiring NFT may mean acquiring copyright for the work, but it is not necessarily the case. Having NFT does not necessarily give you the right to have an original job. If the buyer buys NFT thinking that the original work is copyrighted, he may be at risk of making a mistake, and legally, this is not because the seller did not say so. Note that some NFT sellers sell them under copyright, while others only sell digital ownership certificates for a specific version of the case. In the sense of copyright law, a work is any manifestation of any form of individual creative activity.
Risks of investing in oil
Keep in mind that investing in oil is not risk-free. Let’s illustrate this with an example of investing in art. For some time, investing in works of art on the market is less risky than works that are completely new to the market, because they also have a history of purchase and are known as authors. It would be a good and reliable investment to buy a work by a famous artist who is usually not alive, because such works are worthwhile.
When it comes to investing in NFT, the situation is even more complicated, because the buyer must understand whether the value of the work he wants to invest will increase. In addition, investing in NFT hopes that the blockchain will become more widespread and that the overall trend in NFT will continue to grow.
Is NFT an invention?
NFT has as many supporters and opponents as it has. One of the biggest criticisms of this technology is its negative impact on the environment (which, according to the developers, will change in the future). NFT shows how many areas blockchain technology can be used. There is no doubt that NFT tokens have the potential to redefine the concept of ownership, especially digital ownership. If this technology becomes widespread in the future, it will mean a revolution.