Are NFT’s Worth the Money…or the Hype within the South African Social Media Market Place?
What is an NFT?
In basic layman’s terms Non-Fungible Tokens, abbreviated as NFT’s are a digital asset that represents real-world objects like art, music, in-game items and videos.
These are units of data stored on a digital ledger, called a blockchain, that certifies any digital file to be unique. Further, NFT’s secure digital files which validates ownership within a blockchain.
NFT’s are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos. An NFT functions like a cryptographic token, but unlike cryptocurrencies such as Bitcoin, NFT’s are not mutually interchangeable. This means that they are not fungible.
How is an NFT different from a Cryptocurrency?
Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value meaning that one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.
NFT’s are completely different in that they are not fungible as mentioned above. Each has a digital signature that makes it impossible for NFT’s to be exchanged for or equal to one another. Therefore one NFT is not equal to another NFT simply because of the fact that they are both NFT’s.
What can be Packaged and Sold as an NFT?
The following are able to be packaged and sold as an NFT’s:
Any digital art including –
- Images
- Video Game Items
- Music
- Audio
- GIFS
- Designer Sneakers
- Virtual Avatars
- Collectibles
Sports Highlights and Other Types of Digital Files
Why is the use of NFT’s so Attractive?
One of the main features that make the use of an NFT’s so attractive is the fact that it is impossible to forge an NFT and thus it can act as an artist’s signature and confirm the identity and ownership of the underlying digital object.
NFT’s are also generally one of a kind, or at least one of a very limited kind and have unique identifying codes. This serves as the main reason to why NFT’s are so lucrative as it is a direct contrast to most digital creations, which are almost always in infinite supply. Therefore, limiting supply in theory increases demand and produces a higher valued market for the item in question.
Another reason related to the attractiveness of NFT’s is the fact that the artist can now sell his/her products directly to the consumer as an NFT, which also lets him/her keep more of the profits. In addition, artists can program in royalties, which means that they will receive a percentage of sales whenever their art is sold to a new owner. This is an added bonus to using NFT’s as artists generally do not receive future proceeds after their art is first sold.
So Why Spend Millions on Something that can be Screenshotted or Downloaded for Free?
Well, for bragging rights of course!!!
An NFT allows the buyer to own the original item. As mentioned above, the NFT contains built-in authentication (a unique code), which serves as proof of ownership. Collector’s value those “digital bragging rights” almost more than the item itself. NFT’s can have only one owner at a time.
NFTs’ unique data makes it easy to verify their ownership and transfer tokens between owners. The owner or creator can also store specific information inside them and artists can sign their artwork by including their signature in an NFT’s metadata.
What are NFT’s Used For?
NFT’s afford artists and content creators a unique opportunity to monetize their products. Artists no longer have to rely on galleries or auction houses to sell their art in the same way that a physical store is no longer needed for their art to be viewed and purchased. Essentially the middle man (the gallery) is removed and the artist is able to save on that extra cost.
NFT’s and their place in South Africa?
South African art and artists are entering the NFT game along with museums and looking to transform the way in which art is bought and sold forever.
In South Africa, some in the art world are excited by the possibilities that NFT’s represent, particularly due to the ability to implement what are termed “smart-contracts”, regarding the terms of sale or re-sale that are built into the artwork, which have strong implications for authenticity verification and royalties.
Conclusion
While NFT’s are still very new to the South African market as well as consumers and require governing legislation in order to be regulated within the South African digital space, they definitely show promise for a bright future within this country.
One thing for certain is that in the short time that they have been around, they have made a massive explosion in the digital marketplace, coupled with enormous amounts of money being spent on this “phenomenon”.
From what has been witnessed on a global scale, NFT’s could be the future of the dreaded and tedious process regarding property transfers and so much more within South African real estate market. The possibilities are endless.
Are NFT’s here to stay? In my opinion, most definitely!
