What’s the buzz around NFTs? What are they?

The blockchain revolution has introduced a lot of new concepts and ideas to the world. Be it cryptocurrency, smart contracts, or decentralized finance, this revolution has made the world reconsider almost every aspect of our lives. One such new arena, the blockchain, has recently opened is the NFT.

Non-Fungible Tokens (NFT) have taken the worlds of art and gaming by storm. Whether you think they're a speculative fad or a great new possibility for artists, they continue to make the headlines when they sell for millions of dollars.

NFT are unlike anything we knew before. NFTs are uniquely identifiable tokens that prove the authenticity of digital (sometimes physical) contents. Unlike other crypto assets, each NFT is unique. This means it is impossible to forge an NFT. At a very high level, most NFTs are part of the Ethereum blockchain.

Piracy is one of the biggest issues when it comes to anything digital. There were no ways that existed before NFTs to verify the authenticity of digital assets like artworks, music, graphic designs. NFTs, give every digital asset a unique identity and the ownership of these digital assets is maintained in a public blockchain. NFTs almost solved the problem of piracy in the digital world.

The interest in NFTs is now not just limited to crypto enthusiasts. Almost anyone who keeps track of the latest events knows about NFTs. The trading volume of NFTs crossed the $10.6 billion mark in the third quarter of 2021.

Almost every big brand and artist is launching its own collection. Global brands like NBA have licensed their content to be launched as NFTs. India isn't much behind when it comes to NFTs. Megastar Amitabh Bachchan's 'Madhushala' NFT collection has also received the highest-ever bidding in the country at $756,000 when the auction ended on 4th November 2021. One of the collections in Big B’s NFT collection included the video of him signing the poster, and the autographed authentic physical poster, which was sold for $94, 052 (Approx. ₹69 Lakhs). Salman Khan and Kamal Hassan are also set to launch their NFT collection soon.

NFTs currently function as collectibles. Like paintings, old books, artifacts, and music records, crypto enthusiasts buy the ownership right of the digital equivalent of these artworks through NFTs. NFT owners aim to sell these NFTs in the future at a higher price than the ones they have paid.

Much like everything in the crypto world, the NFT space is still developing. It will be interesting to see if NFTs can replace the demand for physical assets like paintings and artifacts in the future.

Thank you.

Regards,

Jash Chheda (Section J),

Kautilya,

IBS Mumbai.