We have recently seen the rise of NFT’s or Non-Fungible Tokens all over social media. The craze produced $25 billion in sales in 2021. Many celebrities such as John Cena, Eminem, Snoop Dogg, Shawn Mendes and many more have helped catapult this cryptocurrency phenomenon.
What are NFT’s?
NFT’s are essentially digital tokens that provide proof of ownership records in cryptographic metadata, making them exclusive to the buyer. When looking at the actual name “NFT,” the word fungible means replaceable, so NFT by definition means a non-replaceable digital token. That may sound foreign to you but putting it simply, NFT’s are used to prove ownership of an exclusive object.
What are the Different Kinds
NFT’s come in various forms such as art, video game items, music, event tickets, trading cards/collectibles, memes, domain names, ownership records, virtual fashion and miscellaneous online items. They can be just about anything that you can think of. For instance, former Twitter CEO Jack Dorsey sold the first tweet ever as an NFT for over $2.9 million. “The Merge” NFT by digital artist Pak had sales that reached $91.8 million due to an abundance of people buying massive pieces of the art piece.
Why are they so Popular?
The advocacy of celebrities has had a profound effect on the popularity of NFT’s. However I believe that the exclusivity of NFT’s primarily drives their popularity. Once you purchase an NFT, you are the only person in the world who has that particular NFT; using uniqueness as a selling point has never really been explored. Furthermore, digital goods have been sold online before but not with the appealing aspect of exclusivity.
Are they here to stay, and why are they so scrutinized?
In my honest opinion, I think that it is unfair to loop an entire industry into a stigmatized space. I believe that vast ignorance of the phenomenon leads to mass distrust and condemnation of NFT’s. Simply put, society hates what it doesn’t understand and despises ambiguity. Ultimately, I think that NFT’s can serve a variety of utilities. However, I forecast issues like piracy to be a concern for the industry.