(Non-Fungible Qokay) A guarantee of ownership that is immutable on Ethereum, Solana or other programmable blockchain. Although an NFT can certify ownership of any object whether digital or physical, it is widely used to record the ownership of art and collectibles. Collections of NFTs that are based on some theme and generated by the computer are popular (see generative NFT). See NFT blockchains, Ethereum and Solana.
However, an NFT can verify ownership of land in a virtual world or objects purchased in a video game, as well as membership in a group; essentially an irreversible guarantee of title to anything. See vintage NFT, NFT Stats and crypto glossary basics.
What Does Non-Fungible Mean?
Non-fungible means unique and not interchangeable, such as one-of-a-kind works of art. In contrast, anything “fungible” is not unique, such as dollar bills and bitcoins. Every functional unit is the same as any other. See fungible tokens.
The Actual Object Is in a Separate Place
The NFT is a “smart contract,” which is a program on the blockchain typically written in the Solidity language; however, the actual object, which is an image or document, is stored elsewhere, and the NFT provides a link to that location. If the actual object is a real physical item, the NFT links to its digital photo. A popular storage option for NFTs is IPFS, which was designed for longevity (see IPFS). See Solidity.
NFT Investment Services
It is true that even the simplest images have sold for millions (see CryptoPunks). Touting these successes, emerging NFT investment newsletters claim massive potential wealth. Like all wealth-building services, they offer no guarantees.
Evolved Apes Scam
In 2021, people invested nearly $3 million for NFTs of “evolved apes” for an upcoming video game. Marketed as “10,000 unique NFTs trapped inside a lawless land,” a week after launch, everything was gone: the website, the Twitter account and the money. Be careful out there!
Nevertheless, 2021 Was a Bonanza Year for NFTs
An NFT-based collage of 13 years’ worth of daily digital art was auctioned at Christies. “Everydays” by American artist Mike Winklemann, who goes by the moniker “Beeple,” sold for $69 million.
Monkeys are popular because 101 NFTs from the Bored Ape Yacht Club collection sold at Sotheby’s for $26 million. A single ape from the collection later sold for $3.4 million (see Bored Ape Yacht Club).
Twitter founder Jack Dorsey sold his very first tweet as an NFT for nearly $3 million and donated the proceeds to charity.
Who Owns What?
The actual intellectual property (IP) rights of NFTs may be retained by the creator of the work even after being sold, a very controversial subject. In March 2022, Yuga Labs, which does transfer the IP to purchasers of apes from its Bored Ape Yacht Club, acquired the rights to the CryptoPunks and Meebits NFT collections. Yuga Labs stated that CryptoPunks and Meebits holders will also receive IP rights. Valued at more than $3.5 billion, Bored Ape Yacht Club and CryptoPunks were the two most valuable NFT collections in early 2022. See CryptoPunks and Bored Ape Yacht Club.
A Fad or Real?
Proponents claim NFTs are the wave of the future. Opponents say this is insanity as sale prices of computer-generated art have reached the stratosphere. Also, any digital art on the screen can be over copied and over, and the copies are identical to the original. The notion of “unique” takes on a whole new meaning!
NFTs Took a Nose Dive
NFT prices took a huge tumble starting in 2022, and NFTs that sold for millions could not be resold for thousands. However, like Bitcoin and many other cryptocurrencies, price volatility is the name of the game (see NFT winter).
Nevertheless, NFTs may indeed be the way ownership rights to just about anything is secured in the future. The blockchain architecture guarantees proof of ownership. Stay tuned! See OpenSea, Spatial, Terra Virtua, NFT rug pull, crypto art, Cirus platform, blockchain and Ethereum token.
Introduced in 2017, these cats from the CryptoKitties website are an example of breeding digital animals. The two (top) were bred to create the one below. See CryptoKitties. (Image courtesy of Dapper Labs.)
In 2021, the Bored Ape NFTs caused quite a stir when they were offered for sale on the OpenSea marketplace. See Bored Ape Yacht Club and OpenSea. (Image courtesy of OpenSea and Bored Ape Yacht Club).
Milady Maker is a collection of 10,000 computer-generated characters by the artist Milady Sonora. At Coinbase’s NFT’s launch in 2022, this Milady NFT was valued at $300 billion dollars. A data error? It got our attention. (Image courtesy of Coinbase and Milady Sonora.)
In May 2021, Dubai-based 3F Music purchased the NFT of this video for $760,000 but decided to keep it on YouTube because of its cultural value. Since first posted in 2007, the video was viewed more than 900 million times. The proceeds are going to charity and the college education of Charlie and brother Harry.