NFT technology (non-exchangeable tokens in French, editors note) is definitely made for you. Indeed, thanks to this technology – based on cryptocurrency “smart contracts” – you can obtain a tamper-resistant certificate of your purchase, a kind of digital title deed that confirms the uniqueness of your property.
At first glance, all this may seem a bit obscure or without great significance. But the “NFT revolution” is nonetheless underway, according to many specialists in the field. These certificates are exploding the sectors of digital art, next-gen video games and possibly much more. A short tour of the strange and cryptographic world of NFTs.
Buy, collect, sell, speculate
American artist “Beeple” (Mike Winkelmann) sold a digital photo called “Every day: the first five thousand days” for more than $69 million by the Christie’s auction house in New York. However, this digital photo in NFT can be consulted and downloaded by all Internet users who wish. This is not the case with a master’s table that is preciously preserved from view , in the physical world.
But why did the buyer of this statue pay such an amount? Not for the value of Beeple’s digital work as such, but because it was sold with its NFT. The NFT makes it unique and traceable. The digital certificate indicates that it is indeed the original work of the artist. It also lists who sold it, who bought it, for how much and when.
The NFT for me is the trojan horse of the blockchain in the physical world and will spread little by little in all sectors.John Karp, Author of “NFT Revolution, Birth of the Crypto-Art Movement”
This digital collage by the NFT certified American artist can therefore now be sold in another auction, anyone can go and check its authenticity and its journey (usually on the Ethereum blockchain, see box below).
In addition, if the value of the cryptocurrency that made it possible to obtain the NFT certificate of this image increases, the value of this image will increase for the owner of the NFT.
A 10% rise in the Ethereum cryptocurrency and the acquirer of “Every day: the first five thousand days” will see his digital work rise from $69 million to over…76 million.
The technical functioning of NFTs in a nutshell
NFT stands for “Non fungible token”. the principle of “tokens” is linked to that of blockchains, decentralized computer protocols that allow encrypt and secure financial transactions over the Internet network. The The most important blockchain is that of Bitcoin (BTC). A token in a blockchain makes it possible toproof of the validity of a transaction. It is tamper proof.
NFTs mainly use the second largest blockchain (after that of Bitcoin), called Ethereum (ETH). This blockchain Ethereum contains a cryptocurrency, like Bictoin, but it allows in addition to from manage “smart contracts”, what the BTC blockchain cannot do. Even systems through intermediate platforms allow to buy NFTs with Bitcoin. The NFT are therefore technically “smart contracts”, which in their vast majority are created by the Ethereum blockchain (which is also a cryptocurrency).“
Everyone starts with NFTs
Since this year, the total value of the sales of virtual object certificates – the famous NFTs – has increased tenfold compared to 2020. In the third quarter of 2021, it reached 2 billion dollars.
Twitter CEO Jack Dorsey, for example, sold his “first ever tweet” as NFT for $2.9 million in March of this year. A pixelated avatar sold for over $5 million on the CryptoPunk platform, one of the first NFT platforms.
But beyond these auctions at astronomical prices, a whole NFT market is emerging for consumers.
NFTs are increasingly enabling creators to make a living from their art. The main reason is that the number of collectors has multiplied.John Karp, Author of “NFT Revolution, Birth of the Crypto-Art Movement”
Here’s what John Karp, author of “NFT Revolution, Birth of the Crypto-Art Movement,” says that “NFTs appear to become essential in the future“The specialist sees this as the transition from a purely virtual economy, that of cryptocurrencies, to the physical world, or at least to the real economy.”The NFT for me is the trojan horse of the blockchain in the physical world and it will spread little by little in almost all sectors“says John Karp
NFTs can actually be linked to real objects like a Dom Pérignon champagne bottle “dressed up” by Lady Gaga. This bottle is sold in NFT, which captures a property on the physical bottle, as well as its “digital clone”, in 3D.
“The fashion world is diving into the NFT, there are already luxury virtual clothes for example, which can only be worn on Instagram, with a filter system“explains the author of “NFT revolution”.
The principle of NFT is – of course – also developing in video games, often linked to a cryptocurrency. Axie Infinity and Sandbox are the best known. The first offers to buy, raise and sell virtual creatures in NFT. The second is a “metavers” where players develop characters in a virtual world. The Sandbox game consists of building, crafting objects, buying, selling, thanks to the cryptocurrency the SAND, which of course allows the management of virtual assets by NFT.
The four main features of NFTs:
Transparency: the users NFT platforms can see all transactions in a transaction explorer, as is the case with any blockchain (“chain of blocks”, computer protocol that allows cryptocurrency transactions).
Immutability: The Created NFTs cannot be copiedCausing unique tokens associated with unique items.
Decentralization: no entity or natural person centralizes the exchanges, the check exchanges take place by algorithms from all participating machines, with no central authority.
Safety : Created (for the most part) by the Ethereum blockchainthem Non-exchangeable tokens are stored in secure databases located around the world. Of the checks are operated by all computers participating in the blockchain.
Crypto art and the new economy?
John Karp believes the NFT will usher in a new golden age for artistic creation. “First and foremost, NFTs are enabling more and more creators to make a living from their art. The main reason is that the number of collectors has multiplied“explains the specialist. This new economy has been called crypto art. It is defined as the alliance between the technologies offered by cryptocurrencies and art.
For the author of “NFT revolution”, crypto art offers artists an opportunity to get rid of their addiction to online music platforms. “The fact that artists receive a small portion of the income generated by listening to their works on streaming platforms is an inconsistency. The internet creates a direct relationship between artists and their community, so there is normally no need for middlemen. NFTs make it possible to find this direct relationship”, says John Karp.
It is the opportunity to create an economy within the economy that the NFT offers.John Karp, Author of “NFT Revolution, Birth of the Crypto-Art Movement”
So the crypto art movement is starting to “orientate oneself and invent new processes“, according to the author.”The NFT manifests itself in many ways and the possibilities are limitless. The NFT is a proprietary title, but may also contain a usage or access title related to the artist’s actions.“And John Karp to give examples:”Booba made 25,000 NFTs last week giving access to the accompanying video. The group Kings of Leon went further: with their NFT you have access to all their concerts.“
The author of “NFT revolution” believes that a real economic revolution is coming with the NFT. “For example, an NFT that gives access to the backstage (behind the scenes, editor’s note) can later be resold by the owner. It is the opportunity to create an economy within the economy that this technology provides.he concludes.