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When people have wealth in abundance and are living a comfortable life without worries, they tend to create value out of things that have no inherent value. Fungible can be defined as “replaceable.” For example, the Nike shoes in a store or the Gucci bags on the shelf. All these are assets that can be replaced because they were not created/produced for just one person. The reverse is the Case with Non-Fungible; which means having one in the entire world, it is not replaceable. For example; when Jack Dorsey, a co-founder of Twitter put up his first ever tweet for sale and it was bought by someone for millions of dollars. Non-Fungible things have been said to be much more valuable than fungible things. Token on the other hand has a lot to do with blockchain technology which is a buzzword that describes the role of banks and middlemen when you are about to pay for something from your debit card. Blockchain is the technology that publicly records all the transactions carried out on the internet just like in cryptocurrency. It is like a group that validates the legitimacy of every transaction using a public ledger. It eliminates the need for third parties validation. For a transaction to be carried out, there must be a seller and a buyer. For instance, a seller puts up a piece of art for sale, a potential buyer who likes the art and wants to own it exclusively pays for the art. In the process of payment, let us assume the art goes for 2BTC, the buyer then insert his details to pay for the art, the blockchain then runs through all the public transactions to validate if the buyer has 2BTC or more in his account to pay for the art. If the buyer does, the payment will be made and the transaction will be successful, the seller will be credited, and the entire transaction will be publicly recorded on the internet for everyone to have assess to. Therefore everybody knows how much everybody has. The blockchain is being powered by thousands of computers and most NFTs are stored on a blockchain called Ethereum. With the current rise in technology, the way humans value things is significantly shifting and becoming weird on a daily basis.
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Imagine a Cat GIF which you can have access to freely on the internet being sold for about $600,000. The NFT is currently booming because it is new, exciting and there is a lot of hype around it. The NBA saw this opportunity, and are taking advantage of it by selling off short video clips of basketball games for thousands of dollars. It has been recorded that ever since the NBA started selling out these assets, they have made over $3million. NFTs are unique and cannot be substituted for the other. They are the digital certificate of authenticity. For Artists, It give them the opportunity to sell their digital works for huge amounts while still having their rights. For Buyers on the other hand, it gives them the opportunity to financially support artists they like and also gets them some basic usage rights and even bragging rights. For the business minded people (collectors) who collect pieces of art and hope that the value goes up someday, it gives them the opportunity to buy high risk assets, so they can sell for profit when the value goes up. NFTs are good assets to buy. Several platforms have been built around the buying and selling of NFTs such as Rarible, OpenSea, Rarible, Grimes Choice, Oxcert, etc. While the use of NFTs is seen as a welcome development to the world, as it is rapidly becoming a massive market, countries need to amend their laws to allow the sale, purchase and usage of NFTs. Featured Image Source: Forbes
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