The recent weeks have seen a craze in values of NFTs backed Digital contents. The deals involving NFTs have been valued at crazy prices. This have lead to some skepicism about this new deals and craze. Without any further ado lets dive in.
Firstly, what are NFTs?? . NFTs stand for Non Fungible Tokens. This is a token that indicates the ownership of a Digital contents and it’s supported in the etherium blockchain platform. Oh, you might be wondering what does fungibility means, it mean the replication or exchange of an object, content and so on without reducing it values. For example cash. This implies non Fungibles can’t be reproduced without reducing it values. For example artworks. So, what’s the NFTs frenzy about? Let find out
An NFTs can be attached to a digital content like photos, videos, virtual world, articles, quote, anything digital. Let say I owned a NFTs backed photo, it means that I owned the original copy of that photo making any other copy of that photo less valuable and a copycat. In recent weeks some digital artworks was sold in an auction for wild prices with the most notable one being a collection of Digital artworks by beeple called the first 5000 days which was sold for $69 million in etherium coin, a meme called rainbow cat sold for $500k in etherium coin, Jack Dorsey sold his first tweet on twitter for 50 etherium coin. Still, this doesn’t explain what the frenzy around it. Does it??
The valuation given to an NFTs backed content is as result of the believe that this is a way of protecting Digital properties especially for digital art content and also it’s seen as the future of art auctioning. Is it really the future??. Well, time will tell.
So, why the skepicism??, Skeptics believes that the potential of this concept is being overvalued as copies of some of these digital content can be replicated by just doing a screenshot, copy and paste and more even so downloaded on you tube or even saved offline on a browser. Bringing us to the question of how can the originality of a digital content can be know, since the token won’t be seen on those copies. Actually this concept can be useful in the gaming industry for example a motor racing virtual venue was bought by someone which implies that everytime this venue is used for any racing game, this individual will receive a royalty fee. And it is not limited to that. The apex basketball league in USA sold a video clip of LeBron James dunks to an individual which means everytime the video clip is used the individual receive a fee and so on. Since, it is on the etherium blockchain platform it can be monitored and prevent fraudulent activity on the usage of these digital content. Is this really a new concept??
Not really, NFTs have been in existence since 2010 but came to notice probably because of the recent deals. We already have a mini version of this when we buy ingame objects. Then, how is this a Tulip?? To find out, we might need some history lesson.
In the early days of stock investment around mid 1600s, the Netherlands are known for their Tulip flower cultivation which in the experience a boom in the market as the demand for tulip increases creating scarcity which then saw an exaggeration in their valuation leading to people investing in them thereby creating a bubble which eventually burst as investors realised that it was overvalued causing the price to drop massively. Same occur in the late 1990s and early 2000s which saw the end of internet 1.0 and it was termed the dot com bubble. Skeptics believes that NFTs are heading towards such direction and soon will experience bubble burst.
We that being said, I would like to know what you think. Is it revolutionary or it is another bubble waiting to burst??. DM me on what’s app 09094594627.