Exchange values on the Internet - NFT
The last article mentioned a few links about the NFTs market with brands. We see that it’s becoming possible to now exchange values on the Internet. It means that you could buy, sell, collect, rent, or resell digital goods.
So, what is NFT?
NFT is a digital, non-fungible token. You could buy and sell it using blockchain technology. But what does non-fungible mean? What is fungible? We’ll look at each part.
So, what does fungible mean? The Cambridge dictionary means “easy to exchange or trade for something else of the same type and value”. Say we have a $1 note. You have a $1 note. We could exchange it because it has the same value. What about Bitcoin? It’s the same. You have one bitcoin, and so do we. And we can trade it.
What about non-fungible? The word means that “it’s not easy to exchange or mix with similar goods or assets” in the dictionary. Say you have a $1 note. If an artist Banksy scribbles on your $1 note, indeed, you don’t want to exchange it for $1. So, we cannot exchange it. Or you have a T-shirt autographed by a super NBA player, and you don’t want to exchange it for the same T-shirt without an autograph. So, non-fungible is what it means.
What about the difference between digital currency (e.g., Bitcoin) and NFT? The difference is whether it is fungible or non-fungible. Bitcoin is fungible that is easy to exchange. But NFT is non-fungible that is not easy to trade.
Now, there are three essential points about NFT that you want to grasp:
- NFT can create limited goods – e.g., you can make ten limited T-shirts with NFT, but it cannot change the quantity from 10 to 20 limited T-shirts later because the data is on the blockchain and cannot be copied.
- NFT can prove the authenticity – e.g., you take screenshots of a Picasso picture and save them digitally. Later, you would probably show them to your friends. That’s it. The screenshot itself has no value. But in the case of buying a Picasso painting, you can get a certification of authenticity (COA), which holds value. In the NFT, the data is added to a public blockchain that everyone can see. And it cannot make copies. So, it’s worth it.
- NFT belongs to IP rights – e.g., you can get paid royalties in the secondary or third marketplace. What does it mean by that? It means that you sell your digital goods, then the buyer resells them to someone who wants to buy. In each subsequent resale, you get paid a percentage. But real-life is different. It won’t get paid to the creator of work like artists. Only the resellers benefit from the market as it is now. So, NFT makes a difference on this point.
Here are a few examples in NFT that you might find interesting:
- Twitter founder Jack Dorsey sold his first tweet for $2.9 million as an NFT.
Ending this March 21st
Will immediately convert proceeds to #Bitcoin
And send to @GiveDirectly Africa Response
— jack (@jack) March 9, 2021
- Nike bought RTFKT.
Welcome to the family @RTFKTstudios
— Nike (@Nike) December 13, 2021
- A sauna magazine sold NFT with commercial use rights.
サウナランドNFT明日オークション締め切り。e-book SAUNA LAND – SAUNA LAND | OpenSea https://t.co/eGuKR2Oapb
— 箕輪厚介 (@minowanowa) May 9, 2021
- Ryuichi Sakamoto sold NFT for 595 music notes from Merry Christmas Mr. Lawrence.
Launching the sale for single note NFTs of 595 music notes from the melody of “Merry Christmas Mr. Lawrence” by Ryuichi Sakamoto. Auction for original handwritten music sheet available for NFT buyers.https://t.co/byfL7TjirY#skmtnews #ryuichisakamoto #skmtNFT#MCMLNFT
— ryuichi sakamoto (@ryuichisakamoto) December 20, 2021
Many brands, creators, and celebrities will create limited digital goods with NFT and invest more and more in this area. What would you do if you were a brand? Do you invest in it? What do you expect after all?