What is an NFT!?!? NFT's are the most misunderstood assets in the cryptoverse and I'd like to finally set the record straight.
The most common interpretation of an NFT is art, such as an image, GIF or video file on the blockchain that can easily be screenshot and stolen giving the original no value. Just a few days ago I saw an article about a guy in Australia who screenshot every NFT image available and boasted about it. I see this comment more than any other in every forum and social media platform I use. This could not be further from the truth. So what IS an NFT, what gives it value and why can't it be stolen?
The easiest way to explain this is to imagine the blockchain as a record book where each page is called a block. When you mint/create an NFT, you create an immutable transaction record (a block) on the blockchain, just as you do with every transaction on any blockchain. This transaction record contains the information of the sale, the current owner, the previous owner (if any) and the new owner if it's being transferred, THIS block on the blockchain is the NFT and is bound to the digital item. Anyone can screenshot the item as much as they want but they'll never copy or take the data that gives all of the items transaction records and owners. Imagine wanting to sell a very old and expensive piece of art, if you don't have the provenance you're basically screwed, buyers won't even entertain it unless you or they can verify it with experts, an NFT is the provenance of the item, it tells you who created it, who previously and currently owns it and how much it has bought and sold for in the past.
Why does this matter? Transactions on the blockchain are public record so they can be checked at any time by anyone, so if any thief were to try and sell the item the buyer can easily verify that the item is the original and the seller is the authorised owner, even if the thief were to re-mint the item so it had a blockchain record, the buyer could see the multiples that exist and the times and dates they were created and who the original creator was. When an original IS sold by the rightful owner a new transaction record is created which is linked to the previous, listing the previous owner and the new owner as well as other details.
If you're like me you might be thinking, "this could be used in so many more applications than just art!" Well you're right, in fact, art was never the original intention of NFT technology. The music industry is looking very closely at the tech as a means for artists to easily and affordably "copyright" their music. The gaming industry is possibly the largest and most promising use of the technology, in game items can be truly owned by players, giving it real world value and scarcity and because of the security of the blockchain the value can't be diluted by people duplicating the items, if they were ever duplicated the game developers could EASILY tell which of the items were the originals and delete the duplicates from the game. That's not the only exciting part though, because the items are on the blockchain and interoperability is a huge incentive in crypto games, you'll be able to take your items into other games with you! If you've ever seen the movie Ready Player One (if you haven't I highly recommend it) you'll know the main character owns a DeLorean from the hit movie series "Back To The Future" which he can store in his avatar's inventory and select at any time to use in any game in the metaverse; this is the same concept.
There is great debate about art being stolen and created as NFTs and sold online, but what you must remember is that, as with the purchase of ANYTHING with great value, it is up to the BUYER to verify that whatever they're purchasing is indeed the original and legitimate item. You wouldn't buy fine art without knowing for sure who the original artist was, what era it was from and who the previous owners were, this is the same concept with any NFTs. If there are works being stolen and sold on any marketplace, it's only because they buyers are not doing the necessary research before purchasing. Do your research before making ANY purchase and you will never lose out to scammers.
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