Let’s talk NFTs!
NFT stands for Non-Fungible Token, which can be broken down into “Non-Fungible” and “Token.” “Non-fungible” notes that the crypto assets unique identification codes and metadata cannot be traded or exchanged at equivalency. This juxtaposes fungible tokens like cryptocurrencies (e.g., bitcoin), which are identical to each other and, therefore, can be used as a medium for commercial transactions."Tokeninzing" these real-world tangible assets allows them to be bought, sold, and traded more efficiently while reducing the probability of fraud.
These unique files live on the blockchain where they denote ownership. NFTs can be anything digital such as music, images, or video, but most of the excitement lately has been around art.
The most recent splash was made by digital artist Beeple (Mike Winkelmaann) who sold an NFT of his work “Everydays: The First 5000 Days“ for $69 million at Christie’s. The sale set a record high making Beeple “among the top three most valuable living artists,” according to the auction house. Some may equate fine art collecting with the current landscape of NFTs: If you can collect well-known artworks in real life, why not in the digital realm?
Let’s take NBA Top Shot as another hot example. NBA Top Shot was created by a company called Dapper Labs with a partnership with the NBA. It uses blockchain technology to allow users to buy digital “moments” from NBA games. Moments are video highlights that can be collected or sold on a secondary market within the NBA Top Shot marketplace. The moments can be bought in a digital pack (similar to buying a pack of sports trading cards) and different packs cost different amounts of money. Each moment is its own non-fungible token, or NFT, making it unique to collectors. Collectors can resell those NFTs for their own price. Whether people will buy the NFT at that price is up to the market.
NFTs play with the notion of ownership. Yes, anyone can download an image and save it to their computer, but only one person can own it. Same with the physical art realm. Many people can own a print of Van Gogh’s paintings, but only one person can own the original.
NFTs also enable a feature where a percentage is paid to the chain of ownership as the piece changes hands or is sold; simply put, NFTs enable royalties to be paid to the original creator as an NFT changes hands. As a buyer, you are able to support the artist who created the work financially, while also having a sense of ownership over the piece. NFTs can remove intermediaries, simplify transactions, and create new markets. Collectors have a dip in the market knowing the value of the value of the NFT could increase over time.
Several marketplaces have popped up where NFTs can be bought and sold including OpenSea, Rarible, and Nifty Gateway. Now INFINITE Digital is pinpointing a new niche by offering a platform to buy and sell NFTs with a focus on digital sneakers, while also authenticating and tracking ownership of sneakers in the physical world.