NFT technology (non-exchangeable tokens in French, editor’s note) is definitely made for you. In fact, thanks to this technology – based on “smart contracts” of cryptocurrency – you can get a tamper-proof certificate for your purchase, a kind of digital deed that testifies to the unique nature of your property.
At first glance, all this may seem a little vague or without much significance. But the “NFT revolution” is still underway, according to many specialists in the field. These certificates are exploding the sectors of digital art, next-generation video games and potentially many more on the way. A short guided tour of the strange and cryptographic world of the NFTs.
Buy, collect, resell, speculate
The American artist “Beeple” (Mike Winkelmann) sold a digital photo with the name “Every day: the first five thousand days“for more than $ 69 million by auction house Christie’s in New York. However, this digital photo in NFT can be consulted and downloaded by any Internet user who wishes to do so. This is not the case with a master table kept precious out of sight, in the physical world.
But why did the buyer of this picture pay such an amount? Not because of the value of Beeple’s digital work as such, but because it was sold with his NFT. NFT makes it unique and traceable. Its digital certificate indicates that it is in fact the artist’s original work. It also indicates who sold it, who bought it, for how much and when.
To me, the NFT is the Trojan horse of blockchain in the physical world, and it will spread little by little in all sectors.John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement”
This digital collage by the American artist certified by NFT can therefore now be sold at another auction, where everyone can check (most often on the Ethereum blockchain, see box below) its authenticity and its journey.
In addition, if the value of the cryptocurrency that made it possible to acquire the NFT certificate for this image increases, the value of this image will increase for the owner of the NFT.
A 10% increase in the Ethereum cryptocurrency and the acquirer of “Every day: the first five thousand days “ will see his digital work go from $ 69 million to more than… 76 million.
The technical operation of NFTs in a nutshell
NFT stands for “Non fungible token”. that the principle of “tokens” is associated with blockchains, decentralized computer protocols allow encrypt and secure financial transactions over the Internet network. That The most important blockchain is Bitcoin (BTC). ONE polet in a blockchain allowsconfirm the validity of a transaction. It is tamper-proof.
NFTs use mainly second largest blockchain (after Bitcoins), called Ethereum (ETH). This blockchain Ethereum contains a cryptocurrency, like Bictoin, but it allows it Besides of manage “smart contracts”, what BTC blockchain can not. Though systems via embedded platforms make it possible to buy NFTs with Bitcoin. That NFT is therefore technically “smart contracts”, which in the vast majority of cases are created by the Ethereum blockchain (which is also a cryptocurrency).“
Everyone goes into NFTs
Since this year, the total value of sales of “virtual object certificates” – the famous NFTs – has increased tenfold compared to 2020. It reached $ 2 billion in the third quarter of 2021.
Twitter CEO Jack Dorsey, for example, sold his “first tweet ever” as an NFT for $ 2.9 million in March this year. A pixelated avatar was sold for more than $ 5 million on the CryptoPunk platform, one of the first NFT platforms.
But beyond these auctions at astronomical prices, an entire consumer NFT market is emerging.
NFTs give more and more creators the opportunity to make a living from their art. The main reason is that the number of collectors has multiplied.John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement”
This is what makes John Karp, author of the “NFT revolution, birth of the Crypto-Art movement”, say that “NFTs look set to become crucial in the future“. The specialist sees in it the transition from a purely virtual economy, the cryptocurrency, to the physical world or at least to the real economy.”To me, NFT is the Trojan horse of blockchain in the physical world, and it will spread little by little in almost all sectorssays John Karp
NFTs can actually be attached to real objects like a Dom Pérignon champagne bottle “dressed” by Lady Gaga. This bottle is sold in NFT, which establishes a property on the physical bottle as well as its “digital clone”, in 3D.
“The fashion world is diving into NFT, which already exists, for example, virtual luxury clothing, which can only be worn on Instagram, with a filter system“, explains the author of” NFT Revolution “.
The principle of NFT is also evolving – of course – in video games, often linked to a cryptocurrency. Axie Infinity and Sandbox are the most famous. The first offer to buy, travel and sell virtual creatures in NFT. The second is a “metavers” where players develop characters in a virtual world. The Sandbox game consists of building, creating objects, buying, selling, thanks to its cryptocurrency SAND, which of course allows the handling of virtual assets by NFT.
The four main characteristics of NFTs:
Transparency: The users NFT platforms can see all trades in a transaction explorer, as is the case with any blockchain (“chain of blocks”, computer protocol that allows cryptocurrency transactions).
Immutability: That Created NFTs cannot be copiedwhich therefore does unique tokens associated with unique items.
Decentralization: No entity or natural person centralizes the exchanges, that control exchange takes place using algorithms of all participating machines, without central authority.
Security: Created (mostly) of Ethereum blockchainthat Non-exchangeable tokens are stored in secure databases spread around the world. From checks driven by all computers participating in blockchain.
Crypto art and new economy?
John Karp believes that the NFT will usher in a new golden age for artistic creation. “First of all, NFTs are giving more and more creators the opportunity to make a living from their art. The main reason is that the number of collectors has multiplied“, explains the specialist. This new economy has been named crypto-art. It is defined as the alliance between the technologies offered by cryptocurrencies and art.
For the author of “The NFT Revolution”, crypto art allows artists to get out of the addiction of online music platforms. “The fact that artists receive a small fraction of the income generated by listening to their works on streaming platforms is an inconsistency. The Internet creates a direct relationship between artists and their communities, so there is usually no need for intermediaries. NFTs make it possible to find this direct relationship “, says John Karp.
It is the opportunity to create an economy within the economy that NFT offers.John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement”
So the crypto art movement is starting to “find their bearing and invent new processes“, according to the author.”NFT materializes in many ways and its possibilities are limitless. NFT is a title of ownership, but it may also include a title of use or access associated with the artist’s actions.“And John Karp to give examples:”Booba made 25,000 NFTs last week, which provide access to the accompanying video. The group Kings of Leon went further: with their NFT you can access all their concerts.“
The author of the “NFT Revolution” believes that a real economic revolution comes with the NFT. “An NFT that provides access to backstage (behind the scenes, editor’s note) could e.g. resold later by its owner. It is the opportunity to create an economy within the economy that this technology offers.“, he concludes.