What is NFT actually? why everyone talks about it? is it a bubble?
A simple explanation with non-jargon words.
As you can see from the title, it has three questions that I will be answering in this article, and I will be answering them in the shortest way possible with common understandable words.
What is NFT actually?
NFT (Non-Fungible Token) is a piece of data that certified a digital file (can be JPG, Movie, or Music file) to be unique. This piece of data stored on a series of digital ledgers called blockchain, therefore it can not be easily altered or deleted.
For example, let say you have JPG image of your Cat, and in the past, you have copied them 5 times, now you have 5 exact same Cat JPG images. Now that you wanted to make one of those images become unique by giving it a “digital signature” so that that particular Cat JPG image file becomes “the original” separating apart from the rest of the copies. You then convert it into NFT and then you can keep the NFT ID (that piece of data id) in your digital wallet. Because now that particular Cat JPG image file has an NFT ID, then you can transfer ownership to another or sell at the NFT marketplace such as OpenSea, Rarible, SuperRare, etc.
Unlike the rest of the copied JPG files, they are still can be copied and duplicate to unlimited times, thus leaving them with no value to possess.
Why everyone talks about it?
NFT is really a revolutionary technology because it allows to uniquefy a digital file. This is not possible in the past, since any digital file simply can be copied and pasted an infinite number of times with the exact quality.
Now with NFT technology, many digital creators can make their creation into a collectible item. For collectors, is also an opportunity to collect digital assets such as images, videos, documents, or music. This is why everyone is getting excited and talking about it (including me).
Is it a bubble?
In this case, we need to look at the NFT art as two separate things: the Financial of selling and buying NFT arts and The NFT technology.
The Financial of selling and buying NFT arts.
Since people are realizing that they can turn any digital file (image, movie, or music) into NFT and sell it; and fueled by the news media reporting mind-blowing cases of successful artists such as Beeple, Paul Logan, and others who sold their NFT for tens of millions of dollars… Then people out of nowhere are flocking converting anything that they can create/have into NFT hoping to make quick money. Some small investors, see this as an overnight opportunity to buy low price NFT and making a profit by flipping it. Thus the NFT Art market becomes unrealistic. Up to a point where people realize that the majority value of NFT Arts on the market is based on hype. Yes, it is a bubble! and is bursting. And all those overvalued digital arts now become part of the “trash art” movement which I am going to talk about this in my next article.
However, there are artists who still successfully creating NFT such as Trevor Jones, Beeple, Hackato, Pak, and many more.
That is simply because these artists are famous and have followers, thus it makes sense to collect their NFT arts due to the increasing value in the future.
The NFT technology.
The NFT technology is definitely not a bubble! in fact, it marks the beginning of a new era where people now able to treat digital assets just like physical assets in terms of value. I firmly believe that there will be many groundbreaking innovations driven by this NFT technology that are popping up in near future.
Thank you.
