What is an NFT?
NFT stands for Non-Fungible Token. It is a digital token that allows you to buy and sell ownership of an exclusive digital item. This could include artwork, animated GIFs, songs, video game items or even luxury assets. An NFT can either be a one-of-a-kind such as a painting or it can be a series of tokens such as trading cards.
The asset can only be owned by one person and they own the exclusive rights to that asset. So, even though people may be able to use the NFT if it is an image or song, that does not mean that they own it.
For example, take a priceless painting such as Starry Night by Van Gogh. Anyone can buy a print copy, download a picture, or take a photograph of it, but there is only one original painting, and they do not own that painting.
Couldn't someone just copy or steal the artwork?
No, the blockchain keeps track of who has ownership of the digital asset to ensure the file is completely secure. Once the asset has been bought, that person is then the official owner and can choose to keep or sell the token.
Who makes NFTs?
Technically, anyone can make an NFT. There are thousands of NFTs on the market, whether it is a meme image, a digital drawing, an original song, there are many people attempting to make the next valuable NFT.
Most of the NFT market currently focuses on digital art and especially fine art. Owning a piece of art is a hobby for many people in the world. NFTs have made the market more accessible and has increased the awareness and popularity of art.
How much are NFTs?
Forbes speculates that: “A staggering £123 million has been spent on NFTs since November 2017.”
NFTs vary in value depending on how much a buyer and the seller think it is worth. NFTs have been around since 2015 but have recently grown more popular, therefore increasing the market worth.
BBC reported: “On 19 February, an animated Gif of Nyan Cat - a 2011 meme of a flying pop-tart cat - sold for more than $500,000 (£365,000).”
This goes to show that anything could hold value to someone, the market is strange and is still in its infancy in terms of growth. However, the past year has definitely shown that interest and purchasing of NFTs are rapidly increasing.