Let’s start with the basics. NFT stands for non-fungible token. What might be a non-fungible token one may ask? A fungible token is an asset that can be traded on a one-for-one basis. Examples of fungible tokens are dollars and bitcoin. It doesn’t matter which dollar one may have, because all dollars are worth the exact same.
Conversely, a non-fungible token has its own unique value, like a car, a house, etc. The value of one car may not necessarily be the same as the next car of the same make and model. Combined with a public, effectively indestructible record of purchases called the blockchain, it has become possible to own basically anything that comes in digital form.
Now that we know what NFTs are, let’s talk about why they were created in the first place. The main reason for their creation was due to digital artist’s limited protection on the rights to their artwork. Now that NFTs are providing a way to track ownership of digital art, artists are able to better claim ownership and create scarcity to sell their art. While screenshots are still able to be taken, it is similar to taking pictures of real art; where people may possess recreations of the art but they don’t actually own the piece.
This relatively new idea of NFTs does have many pros, especially for digital artists. However, there are plenty of cons. Issues ranging from theft and ownership confusion to a surprising environmental impact have many doubting the success of NFTs as a whole. But only time will tell if NFTs will fade off or become a main market in the future.
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