NFT is the new buzzword. Popularized in 2021 with cryptocurrency enthusiasts, non-replaceable tokens are about to enter other sectors, including video games. We tell you everything you need to know about this controversial technology.
Since the beginning of last year, we often hear about NFT. Celebrities regularly invest colossal sums in what is all too often presented as simple JPG images representing computer generated characters. For example, famous rapper Eminem bought an NFT from the Bored Ape Yacht Club collection at a cost of $450,000.
Presented as simple images sold at a high price, NFTs can make you laugh. Despite the strong media coverage of the phenomenon, many internet users are indeed struggling to understand the importance of NFTs, and the underlying revolution that comes with it and that foreshadows the future of the Internet (the famous Web 3.0). We list this abstract and thorny subject below.
What is an NFT (non-fungible token)?
NFT is the acronym for “non-fungible token”, or “non-fungible token” in French. It is said that something is fungible when it can be “to be replaced by things of the same nature, of the same quality and of the same quantity”, explains de Larousse. Among replaceable assets, we find the money. A one euro coin can be replaced by a one euro coin. Likewise, a Bitcoin can be exchanged with another Bitcoin.
On the other hand, a so-called non-functioning asset cannot be replaced by another element. It’s unique. Just as a work by Leonardo Di Vinci, Monet or Picasso is unique, an NFT is unique. Its uniqueness is easy to recognize. Note, we often speak of NFT to describe visual works (the famous JPG as mentioned above), but it can also be a musical work, a film or a script or the code of a computer element. For example, the first SMS in history was digitized as NFT and sold to the highest bidder. World Wide Web source code was also auctioned off as NFTs, along with the Wikipedia front page.
NFTs also promise to be essential in the future metaverse. Non-fungible tokens can also allow the exchange of digital real estate in virtual spaces like Decentraland or The Sandbox. Also last year, a piece of virtual land in the form of NFT was sold for 2.4 million dollars.
To certify the uniqueness of an NFT, it must: digitized and registered on the blockchain. Currently, a large portion of the non-functioning tokens are registered on the Ethereum blockchain. At the origin of most cryptocurrencies on the market, the blockchain is a decentralized ledger that keeps track of everything that is entered into it. Unlike a more traditional database, the blockchain, or chain of blocks in French, is immutable, immutable and inviolable.
When creating an NFT, all data of a work is digitized and entered into the blockchain. A non-fungible token can contain a large amount of information. Technologies also make it possible to combine a large amount of data, ranging from images to lines of code, including video. Once registered in the blockchain, the work is accompanied by a digital certificate of authenticity. This certificate guarantees that the internet user in his possession is indeed the sole and unique owner of an NFT.
Once digitized on the blockchain, the history of the work (purchases, resale, date of creation, creator’s name, etc.) is recorded forever. That’s why auction houses specializing in art, such as Christie’s or Sotheby’s, have quickly appropriated the technology behind NFTs.
Where to buy NFTs?
There are many platforms for buying and selling NFTs. Among the most popular sites are: OpenSea, Foundation, Ethernity of Rarible. Many cryptocurrency exchange platforms have also started using NFTs by offering their users to buy or sell them through their interface. This is especially the case with the essential Binance, the service that allows you to trade cryptocurrencies.
As explained above, there are many platforms to create an NFT. For simplicity, we will focus on: the method to follow on OpenSea, which is by far the most widely used platform in the industry. Before you start, make sure you have an Ethereum wallet like Metamask ready. To open a wallet, simply install the Metamask app on your smartphone from the Play Store or the App Store. You can also install it as an extension in your Chrome web browser.
We explain in a few steps how to create a non-fungible token (“miner”):
- Go to the OpenSea website or download the app from the Play Store or the App Store
- Press on the button To create at the top of the interface
- Then select Metamask from the digital wallets on offer
- Once the wallet is connected, click My Collections
- Create a collection of works by clicking To create
- Once the collection is created, you have to choose a logo for it by following the on-screen instructions
- Finally, press Add item.
- To elect Add a new item
- Authorize the connection to Metamask
- Follow the on-screen instructions and drag the image into the frame provided
- click on To create
Please note, if you then want to sell your NFT, you will have to pay a small amount in cryptocurrencies (Ether). To put your work up for sale, you absolutely must: pay ethereum network fees. This amount can sometimes be quite high depending on the network congestion.
Should you invest in an NFT?
Holders of a non-fungible token do not hesitate to propose them as excellent investments. By speculating on the price of certain flagship collections, some internet users manage to get rich, or at least make impressive profits in cryptocurrencies.
However, keep in mind that making money with NFTs is not as easy as one would like to believe. After all, the price of all digital works does not rise automatically. By investing in an NFT, you always take the risk of not getting your initial bet back. For some reason, the price of the property may fall and never rise again. This applies to NFTs, cryptocurrencies, stocks or real estate.
Why do NFTs so often arouse mistrust, especially among gamers?
Many video game publishers protested their interest in NFTs. More and more studios want to offer their players skins or items in the form of non-fungible tokens. In December, Ubisoft also announced the launch of Quartz, a platform for acquiring NFTs. This platform provides non-replaceable tokens for in-game use Ghost Recon Breakpoint.
This initiative caused the wrath of the players. Faced with criticism, Ubisoft was forced to remove the presentation video from its YouTube channel. Indeed, many players summarize NFTs with speculation and trading of digital works and believe that publishers are simply trying to get rich on their backs. Also, some video game fans point the finger energy consumption colossal number of cryptocurrencies and blockchains that allow the exchange of NFTs. By using NFTs, they believe that issuers are endangering the environment.
Under these circumstances, they have a very vague view of the implementation of NFTs in their favorite video games. The brutality of critics of NFTs has already caused several companies in the industry to change their minds. This is especially the case of disagreement. The popular messaging application for gamers ultimately chose not to add support for NFTs to its platform after the outcry from its user community. Despite everything, many companies, including Square Enix, continue to express their interest in the technology.
Despite everything, the popularity of NFTs is clearly half-mast by mid-2022. The many controversies they cause, coupled with the dizzying fall of cryptocurrencies over several weeks, has cooled investors. Result: NFT searches drop 75% on Google. The craze seems to be over: Internet users are no longer interested in non-fungible tokens.
However, what has not decreased is the number of scams on selling platforms. In July 2022, the amount collected by pirates was already 100 million euros, just for this year.