Non-Fungible Tokens (NFTs)

Non-Fungible Tokens, or NFT's, is the biggest buzzword in the crypto-space right now, with an NFT recently being sold for an incredible £50m, without receiving any physical purchase. 

What are they?

the 'non-fungible' part of NFT means that it is extremely difficult or impossible to exchange for an equivalent due to personal and unique qualities. 

But the NFT can represent most things digital. A painting, a music track, playing cards or even a tweet. Recently the co-founder of Twitter minted his first ever tweet to the blockchain, being sold for close to 3 million dollars.

Although this tweet has been sold, there is nothing stopping anyone from using the image, or even minting there own identical NFT of Jack's first tweet. 

So what's the point?

Well, in the physical world, there's nothing stopping you from recreating a painting, or printing your own playing cards using your home printer (they probably wouldn't be as high quality, but that's beside the point). But the unique part about NFT's is that they are unique. Their original owner is right there in its code, along with a timestamp of when it was created. You can track the origins of Jack's tweet right back to Jack himself, the same way you can track ownership of a genuine Van Gogh back to Vincent.

Another example of NFT-mania is the NBA's own TopShot application. The National Basketball Association have created their own platform for marketing some of basketball's top moments. Recently, a gif of Lebron James dunking has sold for $208,000. 

Finally, to top of the fanatical obsession with NFT's as of recent, a immortalization of an original Banksy worth £95k to the blockchain. Beginning of March 2021, a group of self professed "art and tech enthusiasts" livestreamed the BURNING of an original banksy, following its minting to the blockchain. This has caused a lot of controversy, being blasted as a 'money-making stunt', but nevertheless reaching £275,000.

Concerns

Many are concerned that, similarly to the original and current doubts regarding bitcoin, that NFT's are in a massive bubble right now. People aren't buying NFT's speculating that their price will increase over time, though that might not be the case. If all of this is just a trend, then we will slowly see NFTs die out and peoples investments become merely a gimic. Though, with the creating company of NBA's TopShot application being funded with $305 million today (https://uk.news.yahoo.com/nba-top-shot-maker-dapper-130100680.html), that gives hope that this could be the start of something great for creators.

Another potential threat to NFT investors is the authenticity of the creator. As blockchain is inherently private and encrypted, it is up to the creator to verify their identity. Theoretically, I could create an account on OpenSea and pose as banksy, but I would have to prove this in some way for investors to gain confidence in me, otherwise my artwork would literally be priceless.