Confused about NFTs? Here is what you need to know
It all started when a tweet by Jack Dorsey was sold for about 3 million Dollars or approximately 150 million ETB. And it's not only a tweet but also varied images, GIFS of cats, short moments of basket games, and so forth that are being purchased for unexpectedly large sums of money. And you're probably wondering why. NFT is the answer... So, what exactly is NFT? This will be the most important question I will attempt to answer in this piece.
To define NFT, I had to do a lot of research to make it intelligible. And it is challenging with all the different logics like cryptocurrency, blockchain, Ethereum, and so on, which are significant topics on their own. But give me a chance. NFT stands for Non-Fungible Token. The next thing that comes to mind is the meaning of the word fungible. And let's simply define it as replaceable, which leads us to Non-Replaceable Token. Now, what does the token stand for? To explain that I have to touch on different topics so bear with me.
When you buy anything and pay with a credit card, what is happening is that the purchaser and the seller's bank are exchanging money after ensuring that the purchaser has enough money for the products purchased. Therefore, the banks are the intermediary that knows every detail about the transactions. However, the 2008 financial crisis in the United States gave birth to a logic known as Blockchain, the engine or system on which all cryptocurrencies (don't mumble, just take it as digital currencies) and NFT's are created. Blockchain records all transactions in a way that makes changing, hacking, or cheating the system difficult (if not impossible). It is also decentralized, which means that power and decision-making shift from a centralized entity like banks to a dispersed network (group of people). This new technology requires openness and responsibility, and it empowers its users. The purpose of this technology is to create a new monetary system that was not in the hands of a few who made choices behind closed doors, but rather a system that operated as a whole for everyone who invested and could be clearly monitored.
Returning to the previous scenario of the bank, but this time utilizing cryptocurrency, the same thing occurs, but differently. The difference is that there is no middleman; instead, transactions are tracked and approved by groups of publicly available computers. You're probably wondering why I'm bringing this up, and it is because the key is right here. In the case of Jack Dorsey, one day, an anonymous Malaysian offered him 2.9 million dollars in cryptocurrencies in exchange for a token or digital certificate stating that the anonymous Malaysian owns the tweet. Once the computers verify that the anonymous Malaysian has the coins, they approve the transaction. So, the Malaysian is now the owner of the tweet, which is written on an unalterable public record.
Now that I've said all of that, let me offer you the definition I received from Wikipedia to summarize it for you:
“A non-fungible token is a unique and non-interchangeable unit of data stored on a digital ledger. NFTs can be associated with easily-reproducible items such as photos, videos, audio, and other types of digital files as unique items. NFTs use blockchain technology to provide public proof of ownership.”
NFTs may be anything digital, such as drawings, music, or your brain being downloaded and transformed into an AI. But the current buzz is focused on exploiting the technology to sell digital art.
NFT gained popularity after selling "Everydays: The First 5000 Days," a collage of 5000 digital images made by Winkelmann (aka Beeple, an American digital artist) for his Everydays series for 69.3 Million USD in 2021.
And recently, a man proposed to his wife using NFT instead of a ring, spending over 500,000 USD of their life savings, and did not receive the response he expected since she was so angry with him for wasting so much money. Several youngsters had collected fortunes thanks to NFT. To round up this article, a colleague inquired if I thought...
Sorry for the delay; I was busy downloading Beeple’s Image, the same image for which the individual spent millions of dollars.
Where was I? Yeah, a friend asked me if I think NFT is the next big thing for our country. That was a difficult question for me to answer. I've seen certain digital artists in the NFT sector, such as Fanuel, Biniam, and Harereta, who I feel are benefiting from it. However, I think it will take time. I mean, how many people are aware of the entire logic of blockchain, cryptocurrency, and so on. Even though we have a long way to go, I believe we will get there eventually. Please share your thoughts with us, and tell us about other NFT artists you know. Until then, ቻው::