NFT technology (non-interchangeable tokens in French, ed) is definitely made for you. In fact, thanks to this technology – based on cryptocurrency “smart contracts” – you can obtain a tamper-proof certificate of your purchase, a sort of digital property deed that certifies the uniqueness of your property.
At first glance all of this may seem a bit obscure or devoid of much significance. But the “NFT revolution” is still underway according to many specialists in the sector. These certificates explode the sectors of digital art, next-generation video games and potentially many more to come. A short guided tour into the strange cryptographic world of NFTs.
Buy, collect, resell, speculate
American artist “Beeple” (Mike Winkelmann) sold a digital photo called “Every day: the first five thousand days“for over $ 69 million from Christie’s auction house in New York. This digital photo in NFT can still be consulted and downloaded by all Internet users who wish. This is not the case with a master’s table held preciously outside the sight, in the physical world.
But why did the buyer of this image pay such a sum? Not for the value of Beeple’s digital work as such, but because it was sold with its NFT. The NFT makes it unique and traceable. Its digital certificate indicates that it is indeed the artist’s original work. It also indicates who sold it, who bought it, for how much and when.
The NFT is for me the Trojan horse of the blockchain in the physical world and will gradually spread to all sectors.John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement”
This digital collage by the NFT-certified American artist can then be sold at another auction, with everyone being able to verify (most often on the Ethereum blockchain, see box below) its authenticity and journey.
Furthermore, if the value of the cryptocurrency that allowed to acquire the NFT certificate of this image increases, the value of this image will increase for the owner of the NFT.
A 10% increase in the cryptocurrency Ethereum and the buyer of “Every day: the first five thousand days “ will see his digital work go from $ 69 million to over… 76 million.
The technical functioning of NFTs in brief
NFT stands for “Non-fungible Token”. the the principle of “tokens” is linked to that of blockchains, decentralized computer protocols that allow encrypt and secure financial transactions across the Internet. The The most important blockchain is that of Bitcoin (BTC). A Token in a blockchain allows itcertify the validity of a transaction. It is tamper proof.
NFTs mainly use the the second largest blockchain (after that of Bitcoin), called Ethereum (ETH). This blockchain Ethereum contains a cryptocurrency, like Bictoin, but it allows Furthermore from manage “smart contracts”, what the BTC blockchain cannot do. Despite systems through interposed platforms allow you to buy NFTs with Bitcoin. The NFTs are therefore technically “smart contracts”, created overwhelmingly by the Ethereum blockchain (which is also a cryptocurrency).“
Everyone is joining NFTs
Since this year, the total sales value 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 ever tweet” as an NFT for $ 2.9 million in March of this year. A pixelated avatar sold for over $ 5 million on the CryptoPunk platform, one of the first NFT platforms.
But beyond these astronomically priced auctions, an entire consumer NFT market is emerging.
NFTs allow more and more creators 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 “NFT revolution, birth of the Crypto-Art movement” say, that “NFTs look set to become essential in the future“. The specialist sees in it the transition from a purely virtual economy, that of cryptocurrencies, to the physical world, or at least to the real economy.”The NFT is for me the Trojan horse of the blockchain in the physical world and it will spread little by little in almost all sectors“says John Karp
NFTs can actually be linked to real objects such as a bottle of Dom Pérignon champagne “dressed” as Lady Gaga. This bottle is sold in NFT which establishes ownership on the physical bottle as well as its “digital clone”, in 3D.
“The world of fashion is diving into NFT, there are already luxury virtual clothes for example, which can only be worn on Instagram, with a filter system“, Explains the author of“ NFT Revolution ”.
The principle of NFT is developing – obviously – also in video games, often linked to a cryptocurrency. Axie Infinity and Sandbox are the most famous. The first offers to buy, breed and sell virtual creatures in NFT. The second is a “metavers” in which players evolve characters in a virtual world. The Sandbox game consists of building, creating objects, buying, selling, thanks to its cryptocurrency the SAND, which obviously allows the management of virtual assets through NFT.
The four main features of NFTs:
Transparency: Users NFT platforms can see all operations in a transaction explorer, as in the case of any blockchain (“chain of blocks”, a computer protocol that allows cryptocurrency transactions).
Immutability: The Created NFTs cannot be copiedwhich then does unique tokens linked to unique items.
Decentralization: no entity or natural person centralizes exchanges, the check exchanges take place by algorithms from all participating machines, without central authority.
Safety: Created (mostly) from the Ethereum blockchainThey Non-interchangeable tokens are stored in secure databases around the world. Of the checks are managed by all computers participating in the blockchain.
Crypto-art and the new economy?
John Karp believes NFT will usher in a new golden age for artistic creation. “First, NFTs allow more and more creators 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 called 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 offers the possibility for artists to break out of their addiction to online music platforms. “The fact that artists receive a small portion 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 community, so there is normally no need for intermediaries. NFTs allow you to find this direct relationship “, says John Karp.
It is the possibility of creating an economy in the economy offered by the NFT.John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement”
Thus the crypto-art movement begins to “find their orientation and invent new processes“according to the author.”The NFT materializes in many ways and its possibilities are limitless. The NFT is a property title but may also contain, in addition, a use or access title, associated with the artist’s actions.“And John Karp to give some examples:”Booba made 25,000 NFTs last week providing access to the associated video. The Kings of Leon group went further: with their NFT you can access all their concerts.“
The author of the “NFT revolution” believes that a real economic revolution is coming with the NFT. “An NFT that gives access to the backstage could for example be resold later by its owner. It is the possibility of creating an economy within the economy that is offered by this technology.“, He concludes.