Nfts
Are NFTs dead?
For most people, non-fungible tokens (NFT) are these weird, often abstract and (they think) ugly pieces of digital art that sell for thousands of dollars or more. On the surface, this seems true. Strange digital artworks depicting monkeys, dogs, cats and other abstract images are being sold for high prices. To be exact, these are valued in crypto like Ethereum, Solana and more recently Bitcoin.
But are NFTs only about digital art?
If anything, NFTs are more like digital certificates of ownership than art itself. When you purchase an actual physical painting, Sotheby’s or Christie’s may issue you with some sort of certificate stating that you purchased or won the painting from them at auction. Or you could have bought the real painting at an art gallery. In any case, official documents normally accompany the painting to prove that you are the current owner.
So think of NFTs this way; you purchase the digital certificate of ownership of this work of art which proves that you are the new owner.
NFTs are different from crypto tokens. Crypto tokens such as Ethereum and Solana all have the same price at any given time. So, for example, if the spot price of Ethereum today is $2,000, then everyone who holds Ethereum has the same spot price for today.
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This is not the case for NFTs. Just like a particular house, car, watch or work of art has its own price, so does every NFT. So a Banksy NFT that is a unique piece of digital art might be worth $500,000, but that price is specific to that particular NFT. An NFT by unknown artist Joe Smith might sell for $100, but it is specific to this NFT(s) in that collection.
The takeaway is that NFTs are actually digital certificates of ownership. So in the future, if a jurisdiction allows it, the land title of a property could have both a paper certificate and a digital NFT that you will need to possess to be called the owner of that land.
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NFTs follow provenance or sequential chain of ownership. Since the NFT is on a blockchain, a buyer or seller can see who previously owned that asset (represented by the NFT), who sold what for how much, any changes to ownership (if tracked), and anything that the NFT is designed to track. . It is then easier to establish provenance. The blockchain explorer on the web would show that the asset was owned by Bob, then it was sold to Susan, then to Luther and so on.
Tendency
Larry Fink, CEO of asset management company Blackrock, sees a future where many of our transactions involving asset transfers are carried out on the blockchain. This is a good way to mitigate, if not eliminate, fraud and false certificates of ownership, since provenance is on-chain and cannot be falsified.
NFTs are definitely alive. These are much more than just digital images of monkeys, dogs, cats and other funny animals. Rather, some of our future transactions involving our major assets and possessions such as physical art or land may involve holding the NFT of that asset to prove that we own it.