WHAT YOU THINK NFTs ARE
When you hear or read about “NFTs”, what comes to mind? Overly expressive caricature art of animals or concepts? NBA player cards? Or maybe even Tory Lanez's latest announcement about selling a million copies of his album as NFTs.
While all of these are what is making this concept such a buzzword, we need to fully understand what they are and how we can utilize them in our day-to-day lives.
WHAT THEY ACTUALLY ARE
So what exactly are NFTs? And why do you need to know what they are? Well an NFT in the technical term can be defined as a “non-fungible token” what this means is that they are a storage of value that cannot be exchanged for another type of storage of value e.g bitcoin.
Now you might ask, what does this have to do with the Bored Ape NFTs that everyone keeps talking about or how celebrities and organizations are rushing into the space, well the answer to that is: RIGHTS. The whole essence of an NFT is that it is first of all “non-fungible” which means it can’t be exchanged for another type of storage of value let’s say another token for instance. This makes it easier to implement the rights of ownership as the unique nature of an NFT makes it possible for the owner to be sure that his/her item is unique and therein lies the value.
WHY DO THEY EVEN MATTER?
So what’s the catch? NFTs are much more than pictures or videos or music, they are actually what owning this media gets you, In the creation of the NFT smart contract (the underlying code), an artist might decide to embed free tickets to shows in his NFT as well as other fan benefits. This Not only benefits famous people as the average artist can decide to create a collection of NFTs which as the value appreciates, everyone that holds it gets a percentage of the profit as royalties, this brings to view the real power of decentralization and its benefit to the common man, but it also allows for the control of value to rest solely on the larger population instead of one main entity thus giving everyone ownership rights as long as their content is on display.
NFTs are digital assets (music, videos, pictures) that contain value embedded in them and are not transferable. You may be wondering why so many people now have bored ape NFTs as profile pictures since they are so expensive and go for as much as $200,000, coupled with the fact that owning a bored Ape NFT guarantees you access to exclusive yacht parties. well, it isn’t as simple as that, people can own these pictures and save them to their devices but this does not necessarily guarantee the value of the NFT going into their phones like the original item is held by the buyer and he has all the rights to the digital asset as well as its benefits.
This is just an example using the Bored Ape NFT which seems to be the biggest NFT collection currently. As more collections drop there will be more exclusivity embedded in digital assets which will herald us into the new era of web3 and the metaverse.