Non-fungible tokens or NFTs in short, seem to be the craze nowadays with the concept gathering a number of curious individuals across the globe who are intrigued by the idea behind it.
Globally, but coinciding also with Malta, the trend seems to have reached an interest value of 100, as confirmed by Google Search Trends. The peak was observed around January 2022.
For those who are not very familiar with Search Trends, a ‘100’ interest value means that the term is at an all time high, when compared to previously observed trendlines.
Okay, so what are NFTs anyway?
The term non-fungible means that the item in question is unique and in no way replaceable with another item. In fact, Merriam Webster defines NFTs as “a unique digital identifier that cannot be copied, substituted, or subdivided,”.
This can be art, music or even other collectables, stored in digital form whereby a person could acquire and effectively own a percentage of the digital artefact.
In other terms, you will be able to get the right to own, let’s say an artwork, while the original artist can choose to keep other legal connections to their work such as copyright.
While the world of blockchain technology can be a bit daunting for someone who is not familiar with the concept, it is worth noting that NFTs are generally available within this framework through technologies such as Ethereum, but not exclusive as is the case with other technologies adapting or reconfiguring their setups to allow for NFT transactions.
So what is the link between NFTs and Cryptocurrencies?
For starters, the way one purchases NFTs is through crypto.
Since this technology is mainly wrapped around the Ethereum blockchain, one might find using the ETH cryptocurrency the easiest way to enter into the domain of owning a few fine art works…
That said, we’re talking about original work here, not a copy of it, so consider this as attempting to buy Da Vinci’s 16th century original painting of La Gioconda (Mona Lisa) and not a copy of it – a painting which has a value of over €792 million ($870), as estimated in 2021 with inflation added, based on the insurance valuation of the painting done in 1962.
On the metaverse side – the recent catchword arguably popularised by Facebook’s latest rebranding to Meta, things look like they’re taking shape too…
In various virtual worlds, NFTs seem to be finding their new home, with people roaming in VR as they view, review and consider purchasing themselves their own piece of original art.
This is of course still quite a relatively innovative way of interacting with others as augmented reality and virtual reality come together to offer a new experience to those who dare venture into this realm.
There is tons of information online for those who are interested in learning more about this concept and the technology powering it.
One thing’s for sure… Make sure you understand well the concepts, possible risks and other opportunities before launching yourself into the abyss of the crypto world.
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The contents of this article/post should not be considered as professional financial advice.