NFTs or “non-fungible tokens” have risen from their status as a niche investment prospect to being spotlighted in the mainstream in a matter of months. But, what exactly is an NFT and are they worth the investment required to break into the market? Let us explore just that.
First things first, an NFT is a unique and non-interchangeable unit of data stored on a blockchain, a form of digital ledger. Essentially, they act as a digital collectable.
While they are typically associated with individual digital artworks, such as the now-infamous Bored Ape Yacht Club collection, they can come in a range of forms and mediums.
Examples of the Bored Ape Yacht Club Collection of NFTs
For example, photography, art, music, videos, tweets, and even memes can all be used as NFTs. This is because the sole entry requirement for any piece of art or media to become an NFT is that it be a reproducible digital file.
However, this is the point upon which much of the scepticism surrounding the burgeoning market arises, as the media people invest thousands into can easily be downloaded or screenshotted for free. Thus, a divide has been created among investors as to the legitimacy of the medium.
The Car & The Owner
A common analogy made by NFT investors and pundits is that of the car. Those in defence of NFTs often make the following comparison to illustrate the issue of copyright: If one was to take a photograph of someone else’s car, that does not mean that the car is now theirs. They cannot drive the car and they do not hold ownership of it as a result of their taking a photograph.
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