What is the NFT market? How does it work?
You have probably heard about the news about some NFT crypto-art object being sold at auction for a huge sum of money. The fact that this video or picture can be easily downloaded by anyone is bewildering. How can you buy something digital that anyone can download for free, why does anyone need it at all, and what is the NFT market about? Keep reading the article if you want to know the answer.
NFT is a relatively new phenomenon that is, however, increasingly in the news headlines. Perhaps, the significant increase in the crypto-currency rates is the driving force of the NFT trend in 2021. To understand and realize the philosophy of crypto-art, we should start with the NFT phenomenon. The abbreviation of NFT stands for non-fungible tokens. In other words, it is a digital certificate given to a unique physical or virtual object as a part of the Ethereum blockchain. To make it clear, we cannot replace the non-fungible token with anything else. This kind of asset is not something fundamentally new in the crypto industry. For example, in 2017 CryptoKitties project emerged on the market, and the most expensive and unique “kitty” was sold at auction for $155,000! Each CryptoKitty was associated with the corresponding NFT of the ERC-721 standard. However, the developers managed to make quite vast amounts of money on this “art”.
Moreover, tokens can only have one official owner since they are protected by a decentralized blockchain. In other words, information is stored by thousands of nodes around the world. Since they record every transaction, it is virtually impossible to change or modify it. Nevertheless, many people wonder about the implementation and use of this technology. Well, there are many examples, but the art and gaming industry seems the most logical answer. NFT can give real value to such digital art objects as music, drawings, collages, videos, etc. Many people, however, would have a fair query: why should we buy it if everyone can download the same conventional picture for free, and it will be a completely identical copy? But in fact, such questions arise if we do not realize the fact that it is the same situation in the real world with objects of art.
Despite the fact that NFT is popular mainly in the sphere of art, it could be really useful in the field of education. Let’s go into details as it is quite an interesting issue. Every year thousands of employers around the world face the problem of diploma forgery by potential candidates. Moreover, such manipulations often remain uncovered for a while. The problem of falsification of diplomas, certificates, and other documents is easily solved by issuing NFT tokens that would display the necessary information in a blockchain. In fact, this mechanism has already been developed, and all that remains is to implement the NFT tool in the education system and other related fields. For instance, universities can issue NFT tokens once a year and provide all identification data needed.
However, the topic of NFT is much more complex and deep, there are more prospects, as well as nuances, complexities, and potential problems. The NFT market democratizes digital art as much as possible, giving the way to experimenters and innovators. Important to note that a lot of pieces of art are bought not only for their qualities but on the wave of trends and hype. In this case, we have the hype around art related to the crypto industry, but it is fair to say that blockchain-based projects have a great and positive impact on many areas of human activity.
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Valentina BEREZA, Team bit4you