What are NFTs?
Non-fungible Tokens are unique digital assets that cannot be replaced or exchanged for anything else, and are validated and stored using blockchain technology. They represent the ownership of exclusive items, and enable the tokenisation of art, collectibles, and even property.
Currently, they seem to be most popular for digital artwork, and blockchain is used not just to store the NFT but also provide a public proof of ownership of the item.
NFTs are not the same as cryptocurrencies like Bitcoin and the lack of interchangeability (fungibility) is what distinguishes them.
What can NFTs be used for?
All kinds of digital items such as text, imagery, videos, music and even social media posts can be bought and sold as NFTs.
The ownership of a particular NFT is a status symbol available for purchase by individuals, and is unique owing to the digital signature it carries.
How popular are NFTs?
First introduced in 2017, the popularity of NFTs has risen significantly from the onset of this year.
According to data from the market tracker DappRadar, sales volumes surged to $10.7 billion in the third quarter of 2021.
Do NFTs have a real future?
It’s debatable. However, believers predict that all kinds of ownership, be it of property, event tickets, or mobile devices, with be validated via tokenisation in the future. NFTs have the potential to transform music, sports, gaming, and several other tangible and intangible products and services.
It is noteworthy that at this stage, like cryptocurrencies, NFTs are unregulated and their true worth is questionable. Like several other digital products, their value is based on perception and remains fragile.