The world as we knew it has really changed over time with the introduction to amazing technologies that aid life and make things a little better, which non fungible tokens is not an exception.
NFTs are not so new but have made some waves recently which puts more eyes on them.
You may be asking what an NFT is, well the letters NFTs stand for a non fungible token, which means a “one-of-a-kind token”.
The NTFs Explained
Non-fungible means unique, it’s one of a kind and can’t be replaced with anything else. Currency units for example are fungible, 1 naira in my pocket can be traded for a 1 naira in your pocket, not 500 naira, It’s the same exact thing.
These NFTs are powered by blockchain technology, the same technology that powers the Ethereum cryptocurrencies.
Now the juicy part of the whole thing is that this technology is being used to grow a new market. The digital tokens can as well be taken to be sort of a certificate of ownership for virtual or physical assets which are stored in a blockchain.
If you were an artist or at least someone who creates digital works, Non Fungible tokens (Nfts) can give you ways to monetize your work.
Yes, it is possible to copy a digital file but an NFT is designed to give you ownership of the original creation.
If you think about famous paintings like the Mona Lisa for example, you can always get prints of that painting but only one person can own the original painting by Leonardo da Vinci.
People who are buying NFTs are supporting the artists they like as well as paying for the bragging rights to own these digital arts (and a blockchain entry as proof)
Non Fungible Tokens (NFTs) in Nigeria
A few weeks back a Nigerian artist Niyi Okeowo by name created a digital painting of the group and posted it on his Twitter page on the 22nd of February 2021.
(Tweet has been deleted)
This Painting now sold for 1 Eth which is approximately (~$1,900) on Rarible.
Nevertheless, this means so much so creative individuals who are into arts in Nigeria to monetize most of their arts using the NFTs.
As an investment vehicle, it is a highly speculative asset, the only reason you would buy an NFT is that you hope the price would go up in the future.
I think it’s quite interesting to see how technology (in this case blockchain) has created new markets (digital assets).
With this and the recent happenings around the NFTs including Jack Dorsey selling his ever Tweet, there can be said to be more coming around this technology most especially in the Nigerian Innovation Ecosystem for creative art individuals to profit/monetize their arts.
How do NFTs work?
Now we are most likely looking at a new sector being born, there are people who believe billions will be pumped into this over the next few years.
This was only possible because blockchain can document the ownership of anything that exists online.
Just like conventional art investing it’s more about the bragging rights that come with owning the original piece. There’s really no intrinsic value, the traditional art market is mostly based on the popularity of the artist.
If you bought a piece of art, you would hope that the artist grew in popularity which would also increase the value of their work. Same with these NTFs.
A lot of individuals still find it hard to understand how NFTs work, most people ask “how is the property save from pirated”, again I have to say that With Non Fungible tokens, your artwork can now be “tokenised” to create a unique digital certificate of ownership that can be bought and sold. NFTs also contain smart contracts that may give the artist, a cut of any future sale of the token and every sale is stored on the blockchain making it almost impossible for the records to be forged because the ledger is maintained by thousands of computers around the world.
So basically if you want to know how Non Fungible Tokens Work you should know that the Non fungible tokens work under the computer program called smart contract.
Basic Grasp on Smart Contract
A smart contract does something very simple – ensure that both parties to a contract fulfil their obligations and no one gets cheated.Techcabal
The Non fungible tokens seem close to the decentralized cryptocurrency we have around now, in the sense of being a digital asset, and also being recorded in the blockchain where it is almost impossible to alter with the records already stored in the ledger. You can understand how the Decentralized finance (defi) can benefit you