Vocageek # 8: NFT, what are these digital tokens for?

How to create unique dematerialized products when they are technically easily reproducible? Welcome to the world of NFT, non-fungible tokens, a practice that could upset the world of art, video games and virtual worlds.

Check out our previous Vocageek articles!

The definition

An NFT (non-fungible token) or called non-fungible token is a cryptographic token that represents a digital object such as an image, a video, an audio file, a 3D object to which a digital identity (a unique code) owned by a single owner is attached. Authentication is validated using a blockchain protocol. Remember that the blockchain is a participatory and decentralized computer system that certifies transactions.

Fungible, what does it mean?

A fungible element wears out with use and can be replaced by something of the same nature, quality and quantity. For example, a one euro coin can be exchanged for another one euro coin. The exchange rate is zero, you will always have a one euro coin in your hand! Conversely, a work of art by Pablo Picasso cannot be replaced or duplicated by another work by the same painter. It is unique and therefore non-fungible.

How does it work ?

NFTs take up this principle of a non-fungible element. But to ensure authentication of the unique digital object, it relies on technology blockchain. The guarantee of authentication, concretely a unique code, will therefore be tamper-proof and will allow you to prove that you actually own this digital object. This doesn’t always prevent a user from copying this object (an image), but they can’t claim ownership of it.

Why create an NFT?

NFTs are of great interest to the art world as any digital creation can now be identified and recognized as a unique work, and then immediately take on value, as anything that is unique. Some things, like memes, can therefore be considered unique works.

A speculative system?

Some believe that NFTs are just the subject of speculation in the art world. A digital image by artist Beeple thus sold for over $ 69 million at an auction!

Everyday: the First 5,000 days, a work by artist Beeple, sold for $ 69.3 million on March 11, 2021 at Christie’s

However, many other uses are emerging. In the video game, this allows certain elements that a single player might possess to be unique. For example, in a video game you might be the sole owner of a piece of land or the only one with a weapon. Ubisoft, for example, has launched Rabbids Token, Unique Rabbids whose sales proceeds are donated to Unicef. Finally, Mark Zuckerberg just announced that the future of the web will cross virtual worlds called metaverses. NFTs will therefore play an important role in securing a certificate of ownership for certain objects.

However, a question arises as to what these digital tokens represent. With them, isn’t the web turning into a huge commercial hall where everything is for sale, even what shouldn’t be?

This video from the Swiss media’s YouTube channel Le Temps explains the essentials of NFTs:

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