Over the past few months, perhaps the single hottest trend online has been the meteoric rise of NFTs, also called “non-fungible tokens”. What is an NFT? Put simply, an NFT is a special type of digital file that lives on a computer. This file could be anything from a song, a video clip, a drawing, or many other things.
These files are bought and sold using a form of cryptocurrency, most often one called Ethereum. Crypto is a different type of currency that works a lot like traditional money, like the United States Dollar or the Japanese Yen. The main difference is that it’s all online, which allows for more anonymous transactions and makes it easier for users to buy and sell. If you’re living in New York City and want to send money to a friend living in Baku, Azerbaijan, you have two options: you can take your United States Dollars and convert them into Azerbaijani Manat or send crypto, which requires no conversion.
The main selling point of NFTs is unique ownership. Anyone can have a photo of an NFT saved on their computer, but every NFT comes with a record of ownership embedded in the file, the same way that a painting would have a providence that shows who has owned it in the past. The only person who truly owns an NFT is the one who purchased it from the seller, in the same way that many reproductions, prints, and replicas of the Mona Lisa exist, but the only real copy of the painting is hanging inside The Louvre in Paris.
In 2020, the band Kings of Leon released an album called When You See Yourself as an NFT. Only 20,000 NFTs were minted, meaning only 20,000 true copies of the album will ever exist. Fans of the band were able to purchase one of these limited edition copies, which also contained digital artwork and other benefits.
The main benefit to the NFT sales model for music and other forms of art is that it allows content creators to set their own prices and receive a greater percentage of that final sales price than they normally would under the studio system. It also strengthens the relationship between the buyer and the artist, allowing the buyer to know that they’ve directly supported the person who made the art they love, instead of knowing the author of their favorite book received $1 per copy sold or their favorite musician received $5 for each $25 CD purchased.
In summary, an NFT is a computer file that contains something unique or special, usually a form of art, whose ownership can be traced directly from the creator to the current owner through the file’s own coding. They’re bought and sold on crypto exchanges using a special type of digital currency (For more information on crypto or to check the current price of Digibyte or other currencies, please visit okx.com. They’re the future of digital ownership and will be used throughout the art world for many years to come.