What is a non-fungible token (NFT)?

What is a non-fungible token (NFT)?

Non-fungible tokens (NFTs) are codes that prove the authenticity of the digital industry and can be traded for thousands of dollars.

NFT Or Non-fungible token (Non-Fungible Token) is a code that is associated with some digital industry, identifying it as genuine and exclusive industry. This artwork can be a picture, a GIF, a song or any other type of digital file.

The term has gained increasing popularity and influenced various markets, such as visual arts and music works. For artists, NFT is a new way to guarantee authorship and specialization for their work, as well as monetize them and engage the public. For investors, Token Digital assets that can be assessed over time and with collective perception. For the environment, it is another source of high energy consumption and greenhouse gas emissions.

What is a non-fungible token (NFT)?

A “token” is like an electronic key, it is a physical device that creates a temporary password so that a person can do something like a more secure financial transaction. In the context of NFT, “token” refers to the digital art registration name. Instead, “non-fungible” means the products are unique and unchangeable.

So, it is Non-fungible token Acts as a cryptographic seal and can be used to prove the authenticity of a product in a virtual environment. There are those who define NFT as a blockchain type of agreement that guarantees that a certain file is genuine and that a certain person officially owns it.

Many compare Non-fungible token On collectible cards, such as sports stands or cartoon collections. Once you have a card, you can collect, sell or trade it. It all depends on its rarity and the value set by society at that time.

At first glance, this is a somewhat abstract and complex concept, so we also need to understand its technical basis: blockchain.

Blockchain

NFT is based on blockchain, the same technology that secures cryptocurrencies (such as Bitcoin). Blockchain was described in 1991 as a way to verify digital documents over time, preventing them from being changed later and freeing them from fraud. It was first used in 2009 by Satoshi Nakamoto, who created a cryptographic digital currency called Bitcoin.

Blockchain works like an obsolete database that can be accessed from any computer. Each new data is stored in a new block which is connected to other existing blocks. Thus, a chain of blocks with data called blockchain is formed.

Data is stored in a linear and chronological way, always pointing towards the end of the chain. Each block contains a code called a hash and precedes the block hash. Hash is created from a mathematical function that converts digital information into a sequence of numbers and letters. Therefore, if one block is edited, the hash changes and the other blocks later become invalid.

This change in hash makes technology more difficult to steal – but not impossible, so much so that cryptocurrencies have already been stolen. For a hacker to be able to change a block, he must change all the other blocks that come in sequence, and he will need a computer that is more powerful than blockchain technology.

Most NFTs operate from blockchains EtheriumA platform where cryptocurrency (ether) is equivalent to BRL 11,944.04.

Crypto art

Jason Bailey, creator of the blog Artonom, explains that blockchain influences the industry market in four ways:

  • Drive sales of digital art through scarcity;
  • Democratization of investment in the arts;
  • Counterfeit reduction;
  • Creating a more ethical way to pay artists.

You Non-fungible token It has also given birth to a new universe: crypto art, a unique digital work of art associated with the unique NFT.

This raises questions about the true value of an image in our digital environment, since we can reproduce it countless times, even with a single screenshot. NFT is based on the concept of digital deficit, which allows you to buy and sell products as if they were physical objects. Non-fungible tokens keep the person as the owner of the digital asset. And this “property” cannot be copied because it is protected by blockchain technology.

In the world of physical objects, such as works of art, it would be like having a work original or an artist’s signature. Everyone can have a copy or a replica, but only one person has the root of the work

Several markets have sprung up to market NFTs, such as OpenC, Rebel, Grimes, and DADA, which serve as an online art gallery that allows the commercialization of works.

Song

NFTs have spread to other forms of commercialization, not just visual arts. For example, music artists have started using non-funky tokens to host their songs, albums, releases and other possibilities.

In Brazil, musician Andre Abuzamra sold the first Brazilian musical instrument, the NFT, and is an ambassador on the Phonogram.com platform. This will allow anyone to purchase phonogram NFT that will be made available by musicians.

When buying an NFT of a certain phonogram, the person starts getting his pass, which he earns on top of his share. In other words, it serves as an investment in music. When a phonogram is played on an online platform or radio, the owner of the NFT receives a share of the earnings.

Meme age

Non-fungible tokens are also used for memes. Famous Nyan catFor example, its GIF 300 sold at ETH, the equivalent of about 50 450,000.

Other memes are being traded for thousands of dollars, which is what made its creator Nyan cat Create an event called “memeeconomy” which basically forms an auction of meme.

In short, NFT has spread through the myriad possibilities of the digital universe and has taken advantage of several markets. Token. Games are also not excluded and are already practicing the possibilities of collectible items that may become valuable over time.

CryptoKitties is a game that has already become quite successful and caused controversy. In it, users can buy unique digital cats and breed them on the blockchain. One of the most expensive cats costs about $ 170,000.

You Non-fungible token Bring a reflection on the true value of things like a digital, after all, what makes us want to own something that can be easily reproduced? Everything indicates that the value of an NFT is defined by its overall perception of its authenticity. It lacks logic and needs to have something authentic and exclusive.

Despite pointing out the benefits to artists, a new risk arose: one could create an NFT for the work before the artist even disguised himself. And not only this, with the help of fire you can do welding Non-fungible token.

NFT negatively affects the environment

NFT consumes a lot of energy. Major markets – such as Nifty Gateway and SuperRay – use cryptocurrency Etherium Which maintains a secure record of transactions through a process called mining, similar to the Bitcoin verification system. It involves a computer network and lots of power.

Several artists have brought the controversy to the fore. Architect Prett created three digital artefacts for sale using blockchain technology, but skipped when calculating what it would use in electricity and saw that it would be the equivalent of the energy it would use in 20 years.

An article published in Quartz highlights the carbon footprint, showing that in its life cycle, an NFT can accumulate a footprint of 211 kilograms of carbon dioxide, which is equivalent to driving about 825 kilometers in a powered US car.

At an event hosted by Valerie Lemarcier, filmmaker and singer, of which six Non-fungible token8.7 MW-hour power consumption, which is equivalent to two years of power consumption of his studio.

A friend of Lemarcier’s, who helped him study the effects of NFT, created Cryptowart.WTF, which selects a segment of the crypto industry and provides rough estimates of energy use and associated emissions.

Despite receiving a lot of criticism for blaming artists, the platform has intensified the debate about the impact of NFT. As a result, many artists are increasingly looking for and encouraging an eco-friendly way of doing business and selling. Non-fungible tokenThere is also a guide that describes and advises on the processes and platforms that make NFTs less sustainable.

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