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Non-Fungible Token, commonly referred to as an NFT, is a unique cryptographic token that can be introduced, offered and exchanged without an intermediary over the internet, much like cryptocurrency. In layman’s terms, NFTs are non-replicable tokens i.e. they are unique. The fact that each NFT is unique differentiates them from cryptocurrencies, which are identical to each other and can be used as a medium for commercial transactions. NFTs are used to symbolise real-world belongings, including paintings, photos, songs and so on. Anyone can tokenize their belongings, and these belongings turned into NFT can be traded. NFT acts as a certificate of ownership as the data gets registered on several systems in the blockchain.

BLACK

The NFT segment is largely unregulated, because of which there is a possibility that an artist’s work might get converted into an NFT without their consent. So, unrecognised artists or new artists in the space are at a greater risk of getting their work stolen by large NFT creators. Also, the nature of blockchain is such that if an NFT is added to the ledger, it becomes nearly impossible to delete or alter that data. Only a renowned artist can make money in the NFT space, whereas talented yet unrecognised artists struggle to sell their work. The copies of their work sold as NFT are available online, so everyone can see them for free. So, it becomes irrational to buy these NFTs. Also, the fear of hackers stealing an NFT looms large. Whenever NFTs are bought or sold, the transaction consumes a lot of electricity. As we are already fighting against climate change, energy consumption becomes a serious issue. Lastly, NFTs are a new space, and no one knows their future, so people could lose interest in NFTs and the people who bought NFTs in the hope of earning millions might end up losing their money.

WHITE

For instance, an 8-bit image by the name of CryptoPunk#3100 was sold for $7.5 million in March 2021. By purchasing an NFT, one is actively taking part in a technological evolution as there is a lot of hype around blockchain technology at the moment, and it is believed that it could bring a significant change in consumer behaviour. Sometimes, it becomes difficult to maintain a record of authenticity and ownership of the artwork, and this is where NFTs shine. As and when an artwork is converted to an NFT, it gets registered in various systems in the blockchain, which means that one’s artwork can never be subject to theft. In the not-so-distant future, this technology might be used to store confidential information. NFTs also make the transferability of artwork easy. For instance, many video games offer in-game purchases to make their gaming experience better. However, these in-game purchases are limited to the game only. But in the case of NFTs, in-game purchases can be issued as NFTs, which can be stored by the players in their digital wallets. NFTs are also creating economic opportunities for artists by giving them a platform to showcase and sell their work, and the proceeds go directly to them, unlike the majority of the social media platforms that do not provide monetary benefits to the artists and the platforms that provide monetary benefits based on the views on that artists’ video or song keep some per cent of their earning. Also, the original creator of the NFT can get a royalty every time the NFT is sold again, as the data stored online also includes the creators’ addresses.

GREY

Quite a few people think that NFTs are a great way to invest, but according to many experts, NFTs are at a very early stage, and thus are quite risky. So it isn’t recommended that one should go through the journey of NFTs for the purpose of investing. But at the same time, buying and selling an NFT is something one should experience at least once. NFT rides on blockchain technology i.e., completely new technology. So just like the concept of the internet that was introduced to the world a long time ago, the early adopters got to experience a new form of technology. So, if one finds the concept of NFTs intriguing, one can try to buy a cheap NFT, or if a person is an artist, they can try to sell their work as an NFT, not for the sake of money but for the experience of it. In the near future, with advancements in technology, NFTs can act as a way to record and prove the authenticity and ownership of a digital product.

By Mohit Sammi

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