Updated: Jun 1, 2021
Blockchain technology, launched 10years ago by an unknown person under the pseudonym of Satoshi Nakamoto provides one of the most secure, quick transparent, inexpensive and safe online transactions. Blockchain technology has shaken all industries globally because it has considerably increased efficiency in finance. A blockchain is a specific type of database where different types of information can be stored. The most common use so far has been as a ledger of transactions. This is where currencies like Bitcoin, Litecoin, Bitcoin Cash, Dogecoin and many more come in. This is where our future is heading. Our money and assets will eventually be, or is already recorded inside the blockchain. It is the safest way of storing data, provided that no one gets hold of your key codes (passwords). Click on this link if you’re not yet familiar with the ‘blockchain’
We are currently going through a crypto art boom. This year digital artists have broken crypto art records. To mention a few, An artist called Beeple having never made over 1000USD from selling physical art, made 10 million USD for 2 pieces of digital art. Beeple's non-fungible token piece, "Crossroad" recently sold for 6.6 million USD, making history as the most expensive digital art sale ever made. Brands like Nike and the NBA have also taken this opportunity to make more money as they’re now selling packages of memoirs in non-fungible tokens (NFTs). For example the great Michael Jordan’s highlights package is now be available as a NFT. Grimes (the musician) sold digital art collections for nearly 6 million USD in less than 20 minutes.
Welcome to web 3.0. Non-fungible tokens are digital assets that represent a wide range of exclusive tangible and intangible items, from digital art pieces, sports cards, virtual real estate and many more digital assets. NFTs are designed to not be equal. Non-fungible simply means unique and irreplaceable. This makes the circulation of fake collectables pointless because each authentic item can be traced back to its original maker. A movie ticket is an example of a non-fungible token because it’s a receipt designed for a specific movie, time and seat. A NFT can be a picture, song, video sentence or any piece of data. On the other hand, fungible items can be exchanged for similar items. Fiat currencies, for example the Tanzanian Shilling (TZS) can be exchanged for any other currency. Cypto currencies tokens like Bitcoins or Ethereums are fungible because a token can be exchanged for another.
Non Fungible Tokens became mainstream when an online blockchain based virtual game called CryptoKitties allowed users to adopt, raise and trade virtual cats. Today, NFTs are ever growing. Dozens of companies are using NFTs to create physical collectables, art market places, domain names, virtual worlds, crypto art museums and etc.
NFTs are have some similarities to the Bitcoin because they’re both tokens and automatically being tokens, information is stored on the blockchain, except, when Bitcoin is traded, it can represent real money at a fluctuating market value. NFTs are unique. When you buy a NFT, you posses a token that says you own something like an art piece which you can trade. But in this scenario, when you trade an art piece, you get something totally different in return. The most valuable part about NFT art is that it is agreed upon value and ownership. In other words, NFT is a form of digital asset whose ownership is recorded on the blockchain. Lets say you decide to buy a piece of art from ‘opensea.io’ the item will have a smart contract that carries information about the product. One of the most important information stored on the smart contract is the agreed value of the property and proof that you own the property. All this information is stored inside the blockchain. NFTs provide security and convenience for a specific asset with a specific value.
The digital space is growing super fast. People are creating new areas on the web that have never been seen before, pushing the digital frontier ever further into the unimaginable. NFTs are rapidly becoming the next big thing in crypto currency. If you’re still asking yourself about NFTs significance, because you may as well copy, screenshot or even download a 500 MB high definition picture, print it out and stick it on your wall, I don’t blame you. You can go to the Louvre and take a picture of the Mona Lisa, resize it, print it out and have it in your home. But what holds real value? NFTs have a record of ownership of the work used as a guide to authenticity or quality or the history of the work. Another benefit of NFTs is that every token has a smart contract and inside that smart contract you can set it how you want. From a digital art point of view, artists can continue to benefit from their work even after the first sale as many NFT trading platforms allow artists to receive commission from future sales.
Supply and demand are key market drivers for price. NFTs are scarce in nature, they’re highly demanded and people are prepared to pay a lot of money for them, which in turn set themselves for good returns. For instance, an investor recently purchased a segment of a digital racing track in the F1 Delta Time game. The NFT representing the piece of the digital track allows the owner to receive 5% dividends from all races that take place on it including entrance ticket fees.
If you were to ask me about my take of the current NFT trend, I think it’s mostly BS and over hyped right now. As far as I know, NFTs hold no value for Tanzania as a country or Tanzanians. It has and will always be that the societies in the northern divide will be the first to experience and normalize new technology before we get a taste. So whenever I hear about a piece of digital art going for a ridiculous amount of money, I fail to resonate the significant values that have been placed on some properties. Nike now sells virtual sneakers. I am still yet to learn what one can do with a virtual Nike sneaker.
In years to come, I see NFTs becoming really useful in our society like having your home title deed, rights to the land that your home is on, your identity information, company information or ownership of physical artwork will all be stored on the blockchain. It’s impossible to hack into the blockchain and make changes to the information stored inside. We are still yet to see what happens in the future, but we are rapidly moving into a better world. We have all the reasons be excited for what is to come.
Lastly, I would like to put my take on whom Satoshi Nakamoto might be. Its either Stuart Haber, Scott Stornetta, Nick Szabo or Stefan Konst or it could just be all of them under one name!