Non Fungible Tokens for dummies
This #PayDecoding, Non Fungible Tokens for dummies (NFT) helps you to keep up appearances in front of your kids… and push your expertise a little further!
An NFT in its most simple form is a piece of artwork (or, more generally, any Digital Asset) with a form of digital signature.
Picasso, Renoir, Dali all their authentic work can be attributed to their actual signature on the canvas or their sculpture. Experts can verify which piece is real.
But how can a digital artist sign their work if everything can be copied and pasted across any site?
This is where the blockchain comes in.
The technology involved in creating an NFT signature involves a whole network of computers reading and approving transactions and data.
It’s the most secure form of ledger and quite simply, it creates a digital signature as proof of who created it along with other vital information.
NFTs are generally one of a kind, or at least one of a very limited run, and have unique identifying codes. What matters is the numerical scarcity.
They can take very different forms: Virtual fashion clothing, Digital art, Avatar, GIF, Video game skins, Collectibles, Music, Poetries, writings, etc.
In 2021, we notice a very strong increase in the appropriation of NFTs by artists of all kinds (composer, illustrator, plastic artist, designer, …) and by brands that anticipate the development of metaverses.
In the last few weeks, Nike, then Adidas, have announced the launch of new collections, in exclusive access, with NFTs that can be bought in cryptocurrency, accessible in the metaverse world.
“Related physical products, such as a specific sweatshirt, will also be available for sale to members of this restricted club who will have acquired these NFTs for 0.2 ETH (Etherum, or nearly 700 euros) per unit.”
But NFTs are not necessarily designed to make money:
- The Carrefour supermarket group uses it to guarantee the secure and unfalsifiable traceability of products such as chickens from Auvergne, for example.
- The Ownest.io application proposes to track ownership on the supply chains.
- In education, some schools (EM Lyon, several high schools in Italy, …) offer to certify their diplomas with NFTs to fight against diploma fraud.
All these NFTs allow to guarantee “transactions” (not necessarily financial) between several entities that do not always trust each other.
NFTs also raise new issues:
- including sustainability,
- environmental impact (blockchains are often criticized for being too energy-intensive),
- and contiguity (with intolerable content).
Ubisoft, a video game publisher, quickly experimented with NFTs, while choosing to reduce its energy impact:
“One transaction on Bitcoin represents a year’s worth of video streaming consumption, compared to 30 seconds on Tezos” (a more virtuous French protocol).
This #PayDecoding Non Fungible Tokens for dummies interesting you?
You want more? Access to the #PayDecoding library