NFT's – the crazy thing the internet raving about. – Explained

NFTs are something people on the internet – are raving about – what are they, and what are their implications?

Search interest for the word "NFT"

(Google Trends, search interest over time for the word "NFT") https://trends.google.com/trends/explore/TIMESERIES/1620386400?hl=en-US&tz=-330&geo=IN&q=nft&sni=3

Firstly let's take a look at an example. Let's go step-by-step into great detail about what NFTs are and how they can be so beneficial for digital creators. If you haven't heard about NFTs, let's make you live over the rock – instead of under it – and keep in touch with the trends.

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Let's come back to NFTs.

Just look at this graphic animation:

Nyan Cat is the name of an animation uploaded on April 2 2011, and became a viral internet sensation. The design of Nyan Cat was inspired by my cat Marty, who crossed the Rainbow Bridge but lives on in spirit.

Source: https://foundation.app/NyanCat/nyan-cat-219

The meme was sold for a whopping $580,000.

More examples of the same are examples are the founder of twitter’s first tweet which was sold as an NFT for a whopping, and oddly specific $2,915,835.47.

Reading this article, is probably confusing – what in this world is a non fungible token?

What is a NFT?

NFTs allow you to buy and sell ownership of one of a kind – unique – digital items, and keeps a record of who owns the items using something called blockchain technology. Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. As we know that NFTs stand for non-fungible tokens, and they can technically contain anything which is digital such as drawings, animated GIF’s, songs or items in video games which are rare. NFTs can be original – the only one on the planet – or a copy of many – till the time the blockchain keeps track of who has the ownership of the NFT. A perfect example of NFTs is a website called “cryptokitties” – the website allows users to buy, and sell virtual - adorable cats, who are each one of a kind – and rare. Meaning, that they are scarce and extremely rare. The first crypto cat was one of a kind and recently sold for a whopping $115000. In this sense, a crypto kitty isn’t different from the Kohinoor diamond (an out of proportion example but I hope this makes sense).

Controversies surrounding NFTs:

Harmfulness to the environment,

Individual pieces of crypto art (NFTs) like the crypto kitties, are partially responsible for the millions and millions of tons of planet-heating carbon dioxide emissions generated by the cryptocurrencies – which use the same blockchain technology which is used to buy and sell NFTs. Experts – artists and environmentalists believe this problem will soon be addressed and resolved – “I think in the next year, year and a half, the emissions will be a non-issue,” says Blockchain for Climate Foundation’s Pallant.

How Are NFT’s beneficial for digital artists?

There are a lot of benefits digital artists will get because of NFTs.

1. Direct Payment. Many artists – before the boom in NFTs would use Instagram, or other social media tools in order to get indirectly paid (such as via views, sponsorships, likes etc). 2. In the revolutionary age of NFTs though, people can just – straight up – buy someone else’s artwork while letting the artist retain their own identity and artistic rights to the artwork.

3.Royalty: Every repurchase of an artwork can provide the artist of the digital artwork royalty which is embedded into their contract – and the same is written into the code of the NFT so – they need not even know that the artwork is changing hands.

All of these examples prove the importance of NFTs for digital creators. NFTs allow creators to sell their artistic creations, and also retain their identity – and their credits to the artistic creation.

There are a few complications when it comes to India though: (the following quoted text is from Reuters.)

India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.

The bill, one of the world’s strictest policies against cryptocurrencies, would criminalise possession, issuance, mining, trading and transferring crypto-assets, said the official, who has direct knowledge of the plan. — Reuters

If this does happen, it would serve as a major blow to digital content creators and would limit their success in India. Experts believe that this proposed law has merit – but there can be different ways to control cryptocurrencies – by not beating their purpose. It would be better for regulation to take place – instead of a flat out ban.

To conclude, NFTs would be a major boon to creators in the Digital space, who stand to benefit from it in many ways, if India decides to ban this, it could serve as a major blow too many creators in India.

This Article has been written by Neil Sudhalkar.

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Read more on "NFT's":

1. https://www.bloomberg.com/news/articles/2021-03-02/nft-art-boom-is-the-same-concept-as-the-photography-market

2. https://www.livemint.com/money/personal-finance/nonfungible-tokens-are-now-in-india-but-mind-the-legal-pitfalls-11617557315927.html

3. https://twitter.com/NandanNilekani/status/1380811992190001152

Thanks for reading. Please share this article if you find it valuable. If you have any questions or suggestions, email: neilsudhalkar@thedailydosage.in or please leave a comment.

Until next time,

Neil.