- Tram Ho
The answer depends on whether you appreciate the rarity of a product. Is owning the original Mona Lisa more valuable to you than having a copy hanging on the wall? For some people, yes.
The true value of NFT lies in its belief in its ability to authenticate. The easy-to-access blockchain public ledger makes it impossible to commit fraud. Every change is recorded in a database maintained by thousands of computers around the world and can be accessed by anyone.
The main point here is that digital products are always easy to copy, counterfeit or pirate. Most creators rarely make money from what they create. NFT is a revolution in this regard. While it’s still easy to copy an image or video file on a computer, the NFT code assigned to the original file is unique.
Today the best-selling NFT items are circulated on the Ethereum network, one of the most popular cryptocurrency systems in the world.
NFT in the art market
NFT is used to protect intellectual property rights with digital art works. Through NFTs and blockchain smart contracts, authors can now embed their identity information in works.
In addition to creating proof of authenticity and ownership with artwork, NFT can also allow buyers to easily access product-related information and services.
NFT also allows for the exchange and circulation of digital works, products that previously had no value suddenly cost millions of dollars thanks to NFT. Artists can easily sell their works as a single or limited edition to attract the right collector or investor.
NFT is a solution to help artists get financial flexibility for their products. A music group can sell works by assigning products to the NFT, or receive a commission when the work is sold without having to pay the publisher or agency.
There are many business opportunities open up: not only helping to prevent property rights violations, NFT’s mechanism of action can also be applied to many other industries.
Not only for the luxury market, for many companies, NFT is a new way to connect with consumer emotions. Snack company Pringles has released limited CryptoCrisp “virtual flavors” NFTs with only 50 versions selling for 0.0013 Ether.
The most exciting NFT transaction was the sale of the JPEG image file “Everydays – The First 5000 Days” containing 5,000 images collected daily for 5000 days since 2007 by artist Beeple (Mike Winkelmann) for 69 ,3 million USD.
This transaction was brokered by auction house Christie’s. Competitor Sotheby’s has also quickly followed in the NFT auction scene.
Canadian singer Grimes raised about $6 million in an event selling NFT art she created.
The Kings of Leon group is the first group to register to release an album in the form of NFT. The song When You See Yourself has been released in a limited number of NFT versions that come with exclusive photos as well as lifetime admission to the group’s shows.
In a February 2021 auction, a pair of ‘virtual’ shoes designed by Studio RTFKT with artist Fewo fetched more than $3 million in just 7 minutes. 600 pairs of shoes have been sold and buyers also receive a physical version of the shoes as a gift. The digital version of these shoes can be used on platforms like Snapchat or on video games.
Twitter CEO Jack Dorsey sold his first NFT tweet for $2.9 million. This money has been donated to Africa Response organization to help fight the pandemic.
NFT of the cat meme Nyan Cat also sold for nearly $600,000. This meme privatization has created an economy with ‘Memeconomy’. Even journalists have caught on: In March of 2021, Kevin Roose, an NY Times author, sold one of his (NFT!) articles for $563k.
Real environmental influences from the virtual world
The big minus of NFT is that it uses too much energy for Blockchain transactions. Due to its decentralization, this technology uses a large number of computers and sacrifices a lot of processing resources to run the protocols and math behind NFT transactions.
According to market data, the Grimes’ NFT sale consumed 122,416 electricity – enough to sustain a family for 34 years. This metric is provided by Cryptoart.wtf, a website that helps calculate the environmental impact of crypto art.
Most NFTs are issued on the Ethereum network, which consumes a large amount of electricity. For this reason, Enjin proposed to create JumpNet, a more eco-friendly blockchain network. however, the Etherum network is also about to undergo a new upgrade that will transform the operating mechanism to save energy as well as achieve higher transaction processing capacity.
Is NFT a Smart Investment?
The NFT movement will probably last a long time. Big names like UFC and Shawn Mendez have signed on to release NFT in the near future. More and more brands and logos choose to come to NFT to create their own products. More and more blockchains compete to create better NFT services as well as many NFT exchange platforms appear.
Source : Genk