Decoding NFTs: Bringing a Dawn to the Digital Art World

Decoding NFTs

Decoding NFTs

What will happen when art and technology colloids? Yes, it will make an irreplaceable duo. That’s exactly happening with Non-Fungible Tokens, also called as NFTs. The buzz around NFTs began when some NFT sneakers were sold for a whopping US$3.1 million recently. While bitcoin and other cryptocurrencies were hailed for their market performance, NFTs took over their popularity in a different way. Therefore, in this article, we are decoding NFTs to boil it down to laymen’s term.

Since the beginning of 2021, the art world has experienced the influence of technology in many ways. One such massive blow came from blockchain. While enthusiasts were chasing after cryptocurrencies like bitcoin and ethereum, which were rallying at record highs, others were after digital artworks that were traded in from of Non-Fungible Tokens. Famous and most admired artworks on social media platforms were finding a place in the new kind of market. Today, the NFTs are being sold for millions of dollars, making the artists millionaires overnight. Maybe in the future, these NFT artworks might have a special place in the history of art and culture.

 

What are NFTs and how do they work?

Non-Fungible Tokens, also known as NFTs, are digital assets that can be exchanged for a certain amount of money. It uses blockchain ledger technology to store real-world objects such as art, music, videos, and so on. Even when the content is copied, duplicated, and remodified, the original source will have the same value it had in the beginning. Thus NFTs are unique and its value cannot be compensated for another asset of the same or different kind.

Art and music works are known for their rarity and uniqueness. Think about the famous Monalisa painting. Even the least interested person in art would know its value. But the recognition for the right artist is narrowing down in the digital world as many people make manipulated or duplicated content of the same artwork. Fortunately, NFTs came to their rescue. In NFTs, the string of ownership is stored in a record-like ledger commonly known as the blockchain, the backbone of the famous cryptocurrency, bitcoin. The process of converting art into NFT is called tokenization. Every token has its own unique identification and carries the signature of the artist. NFTs don’t provide anybody with copyrights or usage rights until and unless it is clearly recorded in the license.

 

The divide between NFTs and cryptocurrencies

Except for the core blockchain methodologies, nothing is common between cryptocurrencies and NFTs. The fungibility in NFTs is securing the content from losing its value. Whether it is for physical money or for cryptocurrency trading, the NFT’s value stands at the same level despite distractions like how one dollar is always equal to one dollar. The fungibility gives an edge to NFTs and attests to a secure and safe transaction.

Unlike bitcoins, the value of NFTs doesn’t change, and each token has a digital signature that makes it special. For example, an NFT digital art is not equal to another NFT digital art. Even though both are valued beyond the normal rate, you can’t equalize one’s price by paying the other as an exchange.

 

Addressing the skeptical side of NFTs

People (real name Mike Winkelmann) who make millions of dollars in NFT also see this as a bubble. It is not just him, even many crypto enthusiasts are skeptical about NFT and call it another attempt by crypt grifters to attract attention into the digital asset market. They also slam the concept of buying something which is not there at all.

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