Post Menu and Details.
- What Does NFT Stand For?
- How Are They Created
- Video Games
- Cannot Be Broken Down
- Value And Economy
- Value For Artists And Creators
Reading time: ~4 minutes
NFTs are an interesting concept for those in the digital space. It is a new idea that has taken off recently and has been starting to grow in popularity and appeal. Here are a few different things that you must consider before you purchase or invest in it.
What Does NFT Stand For?
NFT stands for non-fungible tokens. These are digital representations of real-world assets. They can represent almost anything that can be created or replicated digitally in a wide variety of products and industries. You can own NFTs for shoes, sports cards, artworks, and even real estate. Unlike other assets like stocks or cryptocurrencies, these are not interchangeable with other NFT assets, as they are all individually unique. Similar to an original painting by an artist, you cannot recreate the same exact painting. Even if you were to create prints, those would be greatly different and would hold different values. Even if the artist were to try to recreate the painting, that would have differences and would be unique. It is through this scarcity that the worth of the NFT rises, causing an increased demand and perceived value since there can never be two identical, interchangeable NFTs in existence. This helps facilitate both lasting values as well as security for your digital assets as well.
How Are They Created
In order to create an NFT, you have to do several things. First, you need to create the NFT itself. Once that digital asset has been created, you will then use different platforms to legitimize and mint them. This attaches data to the specific works and, depending on your choices, can be made as a unique piece creating that scarcity and value or creating multiples to allow it to be more shared and owned. Depending on the platform you use, there may be fees to pay. In most cases, these platforms primarily use cryptocurrency in the form of Ethereum in order to cover their fees. This is in order to ensure the compatibility of the NFT products with the network, as they utilize blockchain technology in order to create these unique products.
NFTs are still a new asset that is continuing to not only increase in popularity but grow and expand in different ways with different utilization. NFTs can be used in video games as assets, allowing you to purchase and sell assets as you normally would in many games. The problem with certain games is that the assets you gain are not always yours to do with what you please. They are still owned by the companies that make the games and have the right to delete, destroy, or remove your items. With NFTs, this could revolutionize the ownership aspect and give you full entitlement when you decide to buy a skin, or character, or whatever digital property you choose. The company Gala games have explored this opportunity in order to empower its consumers and gamers instead of leaving them in the control of large companies. If this grows in popularity and is adopted by large developers, you will start to see assets being utilized over different games that can be traded and sold by its players, and not at the discretion of game studios to dictate.
Cannot Be Broken Down
NFTs are assets and hold value similar to cryptocurrency. However, unlike bitcoin and other currencies, you cannot divide NFTs into smaller fractions of itself, much like bitcoin. NFTs are singular and whole entities. Much like any artwork in real life, you cannot break it down to get a fraction of the value. That would, in reality, destroy the value. The positive thing is that NFTs cannot be destroyed. This increases their value much more than physical assets, as those are subject to deterioration or depreciation.
As previously noted, NFTs are significantly secure. They cannot be destroyed and are secured by the blockchain technology that is used to create, verify and protect these assets. Because these assets are held and secured in a digital space, you cannot steal and take assets belonging to someone else without authorized transactions or exchanges. All assets have data stored in regards to the ownership and history of each NFT.
Value And Economy
There are many factors that contribute to the value of NFTs. Of course, it has already been established that they exist in digital space where they are created uniquely and that scarcity is what gives it the increased perceived value. Such assets have a history connected to them that not only include any transactions but also can be traced all the way back to its origins and creation, ensuring that it is legitimate. Much like artwork, where originals hold significant value, the same goes for digital assets, with their value being tied in with who created them. The ability to easily authenticate such products that cannot be replicated holds significant value to the assets but also the entire system as well.
When you buy an NFT, it is yours completely. Unlike other assets that you purchase, like video game items and skins, music, or movies, where you don’t actually own these, only the right to use and access them, you own whatever NFT you have purchased.
Value For Artists And Creators
There is a great deal of interest in the creative aspect of NFTs in terms of artists, not just collectors and investors. Artists will typically sell their pieces and make profits on single transactions. If they start to get famous or popular, those pieces may increase in value, but the artist doesn’t see profits on the original piece anymore. With NFT, artists can make a percentage on every transaction. This encourages its creators to explore the digital realm and space, ensuring the growth of NFT and its constant support for the creators themselves.
There is a lot of money being spent on NFTs, with thousands and millions of dollars being invested into different assets. This could be a trend that fails to catch on or could prove to have lasting appeal. Regardless of the outcome, it is truly an interesting new concept that is innovating various industry spaces in the digital realm.
Thank you for reading!