What are NFT’s?

By Alan G

Dec 29, 2021

What are NFT’s?

If you’ve been keeping up with the latest online trends for the past few months, then you might have come across the term “NFT” quite a bit. The three-letter acronym has been hitting the internet on social media platforms, gaming websites, online art directories, and even business news sites who are all equally interested in keeping a close eye on its development. Don’t worry if you still have no idea what an NFT is, because you wouldn’t be the only one. I’m Alan, and I’ll be holding your hand as I walk you through the curious world of NFT’s. This will be a comprehensive breakdown, but I’ll be keeping it simple and easy to understand so you can impress your co-workers during your lunch break tomorrow with this newfound knowledge. Ready? Let’s get right to it.

First and foremost, let’s break the acronym down. NFT stands for “non-fungible token”. What type of token is it, and why is it non-fungible? Why can’t we funge it? What even is funging? Well for a digital item to be non-fungible, it would have to have a unique code and metadata that distinguishes it from others assets, and most importantly, cannot be replicated. In simpler terms, it’s one of a kind. The easiest example of an NFT would be digital art. Physical art such as a painting has real-life monetary value. In the digital world, it’s the exact same. Let’s check out an example.

Those six apes up there are part of a digital art NFT collection. While they are not physical art, they are still considered individual pieces of digital art. Apes have been a very popular design choice for NFT lovers thanks to their wide range of customization options. These six all have very different attire, but the artist does not have to deviate from the original ape prototype design very much. Charming, aren’t they? The one in the top right is smoking a cigar and goes for just under $60,000! When I gave an ape a cigar all I got was a lifetime ban from the zoo. Life really isn’t fair.

Got a basic understanding of what NFT’s are starting to look like? Awesome, we’re just getting started. The digital art side of NFT’s are not exclusive to apes. They could literally be any form of art the artist desires to create. However, not just anybody can create a piece of digital art and call it an NFT. The difference is in the tiny, and I really do mean tiny details. Within each file found online, whether it’s a picture or a video, is data. A sequence of code that essentially gives a file its identity. For us, we can tell what a picture is by using our eyes. Computers on the other hand, use metadata to recognize what a file is. So, how exactly do you incorporate unique code into digital art to make it an NFT? That’s where blockchain comes in. Let’s get the pros (fighting the urge to call them nerds) at IBM to explain it a bit better.

“Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding).”

Basically, it is a fully digital record book of online transactions while serving the purpose of tracking and keeping count of assets or inventory. Since NFT’s fall under the category of intellectual property, they are considered intangible assets. The great thing about blockchain technology is that it cannot be tampered with. If you wanted to lie about the authenticity of your assets, all you would have to do is change the numbers in your accounting book. They’re numbers you can erase or modify with a simple pen. I’m not advocating for white-collar crimes here, but blockchain eliminates any possible alterations to transactions of assets. This foolproof way of maintaining legitimacy is very welcome news to people who are afraid of being scammed. Why is this important? Let’s find out.

Those ape NFTs you just saw up there? When someone purchases one, more often than not, they’d like to show their new art off. You don’t have to be in your penthouse sipping on wine that you pretend to like just because it was expensive to show art off anymore. NFT owners are making them their profile pictures or just uploading them as individual posts on their websites as proud owners of the NFT’s. Now, let’s not forget about the nature of the internet. It is a fantastic, innovative, life-changing creation that has made communication and design easier than ever. However, the internet remains the internet, and people are going to want to spoil your fun. You have an NFT that you paid significant sums of money for as your profile picture. I click on your profile and right-click on “download image”. Within seconds, your NFT is now saved on my computer. What’s stopping me from using it as my own picture and claiming it’s mine? See where I’m trying to go with this? Yes, they may have a picture that looks identical to your NFT, but they do not have the metadata stored within the blockchain to claim its authenticity. It’s as good as someone taking a really, really high-quality picture of the Mona Lisa and claiming it’s theirs. No amount of photoshop will make you Da Vinci, just like no amount of mouse clicks are going to legitimize your fake NFT screenshot. Better luck next time, trolls.

Moving away from digital ape art, let’s talk about the gaming world. When NFT’s rose to fame in the mainstream media, the gaming community were among the first to react. Gaming is fully digital. The only physical presence comes in the form of a console/PC and a controller. It didn’t take long for certain companies to capitalize on the rise of NFT’s, creating their own in-game purchases. In the past, you could buy a special game item through microtransactions, but technically speaking, it still belonged to the creators of the game; you were just borrowing it. With NFT’s, you can now become the legitimate owner of whatever microtransactions you desire to spend your money on, as long as the gaming companies decide to go the NFT way. Ubisoft Entertainment is a world-renowned gaming company. Besides making me break my controller in frustration at realizing I’m not good enough to ace their games, they decided to include NFT microtransactions in their upcoming game “Tom Clancy’s Ghost Recon Breakpoint”. With a gaming giant backing the future of NFT’s, it is a huge step forward for the potential marriage of online gaming and non-fungible tokens.

Interested to see just how diverse NFT’s can get? Look no further than Jack Dorsey, the founder of Twitter. If you can fight your way past the toxic political arguments and flat earthers, Twitter can be a wonderful place. Jack had a brilliant idea to capitalize on his already insanely valuable platform even further. He would sell his first ever Tweet as an NFT. Sent out on the 21^st of March 2006, “just setting up my twttr” marked the beginning of the website’s online presence. I know, it’s hardly Shakespearean in nature, but it’s an important piece of social media history. Again guys, this is Twitter. Just yesterday I found a viral tweet claiming that the world is undergoing mass depression because teenage witches put a hex on the moon. How I wish I was joking. Anyway, Jack’s first ever tweet sold as an NFT for $2,915,835. You read that right. That’s almost 3 million dollars for six words of text. For any of you shaking your heads as to why anyone would spend that type of money, relax your neck, and let me tell you exactly why.

Sure, people like feeling important and owning digital art of value. It is a very modern way of flexing your love for futuristic artforms while maintaining creative designs. However, because NFT’s are still very much on the rise, there is a unanimous understanding that these pieces of art have high resale value. A lot of people purchasing these NFT’s use some sort of cryptocurrency to buy them. We’re not just talking Bitcoin, we’re also talking Ethereum and Dogecoin. They have a great track record of being legitimate and safe payment methods. They’ve even become the best option of payment on most iGaming sites. More and more people are starting to hop on board NFT’s and they’re evolving to becoming serious commodities to buy low and sell high, much like traders are doing in already established stock exchange markets. Today, NFT’s might be synonymous with funny looking apes with colorful designs and wacky clothes, but they’re certainly much more than that.

NFT’s are breaking into the world of gaming at a significant pace. There’s a cumulative buzz around the internet about the potential of the two working together. Gamers and experts alike are not only curiously watching on but taking a hands-on approach to get into the NFT gaming world. As the saying goes, you have to strike while the iron is still hot. We’ll be publishing a follow-up article that offers a deep dive into how gaming and NFT’s are collaborating together. Watch this space and stay tuned, you’re not going to want to miss it.

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