Todd Sumamno
NFTs are the future of art. They’re also the future of collectibles, ownership, and digital assets. Let’s begin with a quick history lesson: in 1995, modern artist Maurizio Cattelan produced a sculpture titled “L.O.V.E.”
It was an acronym for ‘Large Ornament/Value Equivalence’ by adding seven letters to his name as he had done before in previous works (e.g., MURDERER).
This particular piece later became part of an installation called Milan-Berlin Axis, where it got displayed at Art Basel Miami Beach during the same year alongside Damien Hirst’s The Physical Impossibility Of Death In The Mind Of Someone Living. It is an iconic work whose auction estimate was $70 million when resold at Sotheby’s New York in 2017 after being sold privately in 2008 for $18 million as reported by Bloomberg Businessweek that year.”
What Are NFTs?
NFTs are non-fungible tokens. They can get owned by one person, and they are unique. What does that mean? It means that no two NFTs are the same. And even if they were exact copies of each other, they would still get considered different because they have distinct ownership.
In other words, while a physical painting might be worth $10 million after selling at auction in Europe or New York City, an individual NFT could also cost $10 million if it’s valuable enough due to its rarity and uniqueness.
NFTs are blockchain-based. Blockchain is a distributed ledger technology used for recording transactions without the need for any central authority or third-party services like banks or governments who traditionally verify these transactions as proof of ownership (think about how when you buy something online using PayPal).
The distributed ledgers help to ascertain the value of the cryptos in the cryptocurrency markets. Cryptocurrency prices vary depending on the demand for the currency and the sentiment of the traders. Cryptocurrency value creation can happen over some time as the prices appreciate.
The Origins of NFTs
NFTs are a new kind of digital asset. They are non-fungible tokens or unique digital assets that cannot be replicated or copied. This means that each NFT is unique and can only exist once in the world. These tokens typically represent something physical, such as artwork or real estate, but they can also represent intangible concepts like personal identity data or social media profiles.
NFTs have been around since 2009, when cryptocurrency trading began on platforms like OpenSea and Rarebits (precursors to OpenSea). Since then, they’ve become all the rage with crypto enthusiasts who want a piece of this innovative technology!
How Do You Create An NFT
To create an NFT, you have to have a license. This can get granted by an art community, or it can get sold on the open market. The license is essentially an agreement between the creator and anyone who buys it that states what they can do with the asset.
The NFT itself is a digital piece of art created by artists and other creators that can be traded on the market and bought by others for their personal use. Anyone can create their own NFTs, but for them to be valid, they must first have a license from someone else who has already issued one before them.
Proof-Of-Work vs. Proof-Of-Authenticity
Proof-of-work (PoW) is a type of algorithm that verifies the authenticity of a digital asset. The most famous blockchain application to use PoW is Bitcoin, which uses a cryptographic puzzle as its verification method.
This means that computers around the world are racing against each other to find solutions for these puzzles, with one computer finding the solution first getting rewarded with some bitcoin or another cryptocurrency.
The problem with this system is that it’s very costly and inefficient relative to other consensus algorithms like proof-of-stake (PoS), where users can “stake” their holdings in return for providing validation services on the network.
While there have been numerous attempts at developing proof-of-authenticity systems using PoW (such as Hashgraph), none have proven successful enough yet because they require vast amounts of energy consumption – right now, approximately 30 terawatts globally!
Famous Examples of NFTs
- CryptoKitties (meow)
- Decentraland (woot)
- Crypto Celebrities (hi, we’re the Coindesk team)
- Etheremon (didn’t see that coming, did you?)
- CrytpoPunks (you know what’s cooler than a crypto-collectible? One that has real value!)
- CryptoBots
Is It Worth Investing in NFTs
NFTs are a great way to diversify your portfolio. They’re also a great way to get involved in the crypto world.
If you’re an artist or musician and you’ve always wanted to make money off of your art, NFTs are a great way to do it—especially if you don’t have a big following on social media.
And even though they can be expensive, some people like collecting rare items just for fun (and bragging rights).
Are There Drawbacks to NFTs?
There are drawbacks to NFTs:
They’re still a relatively new concept. While traditional forms of art have been around for centuries, digital assets like NFTs have only been around for about five years. As a result, it’s hard to assess their value and even harder to determine how they should get treated by government regulators.
They’re vulnerable to fraud. One reason that we rarely see fraud in the traditional art market is that there are so many established institutions (dealerships) that help make sure each piece is what it claims to be and that its provenance can get verified.
When you buy a Picasso or Warhol on eBay, there’s no one checking out the authenticity of your purchase before you get home with it. If something happens along the way (like if someone tries to sell an identical version), there isn’t much legal recourse available.
It is either since most “buyer beware” laws apply only when money changes hands; otherwise, all bets are off! In contrast, when someone buys an NFT from me directly through OpenSea Marketplace using cryptocurrency (no third party involved).
I’m legally responsible for everything since this situation lacks intermediaries who could verify whether my title deed is valid or not if something goes wrong after purchasing one of my digital assets without any recourse available.
More Investors Get Involved
NFTs are a new way to invest in art, and they have the potential to become one of the most valuable forms of art storage and investment. As more investors get involved with this type of investment, we will likely see an increase in both their value and demand.
Over the next few years, we are extremely likely to witness a surge in the number of NFTs and their sales price as more investors get involved with this type of investment.
Conclusion
NFTs are exciting and unique. They are a great way to get involved in the art world, they offer good investment opportunities, and they provide a good way to diversify your portfolio. If you have an interest in collecting modern art or just want to learn more about NFTs, this article should have been helpful for you!
Brittany
