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Practical Techie: Collectors can buy digital art or real estate with tokens

A new year, a new set of aspirations. And a new venture within the technological universe is to experiment with Non-Fungible Tokens.

What? NFT, being such an unassuming commercial venture, the name does have a high-tech ring. Essentially, it has to do with blockchain technology, cryptocurrencies, etc. So, what are non-fungible tokens?

NFT — These are digital currencies based on the macroeconomic concept of convertibility. Money, we know, either physical or digital, is a convertible asset, as are oil and gold.

The Oxford Dictionary defines fungibility as replacing another identical item or “mutually interchangeable” assets. Tokens digitally represent any item, including online-only assets like digital artwork or tangible assets such as real estate. Other examples include in-game items like avatars, digital and non-digital collectibles, domain names, and event tickets to concerts and special events. Add films, music, or properties in virtual worlds used in avatar portals such as Second Life.

Because NFTs represent a specific asset, they are not as convertible as are other more conventional money or data-bit currencies. Thus, the concept of non-fungible.

VENTURE — It turns out that artists, influencers, and the US National Basketball Association make millions from non-fungible tokens. Enthusiasts see NFTs as the future of ownership. From event tickets to houses, all kinds of property can have an NFT ownership status. For artists, NFTs could solve the problem of how they can monetize digital artworks. The NBA launched Top Shot in 2019, a marketplace for NBA highlight reels, which users can collect and trade through blockchain technology.

An NFT can be resold in the marketplace for cash or cryptocurrency and is taxable revenue.

Data from DappRadar, a firm that tracks sales, showed that trading in NFTs reached $22 billion in 2021, compared with just $100 million in 2020.

ART — It happens that cryptocurrency is easily adopted in the art world to render profits. It is an intersection of bit data and art to empower creatives through innovative web offerings. As one creator describes, NFTs allow artists to interact directly with fans and make a living off their craft without a centralized intermediary.

For example, sites such as Known Origin sells graphic arts from international creators based on the Ethereum Blockchain concept. Anyone can collect, buy, and sell digital art using NFTs as an exchange currency for goods. 

Even designer entrepreneurs are marketing their fashion creations through the NFT currency concept.

WALLETS — All NFT art objects sell through electronic wallets which send, receive, and store digital assets. Wallets are in many forms, installed into a browser, extension, a piece of hardware plugged into a computer, or an app on your phone. This e-commerce site Eth Hub, explains the concept of Ethereum wallets which use a digital currency called Ether. The person opens and funds a crypto wallet on an NFT marketplace to do e-commerce or invest.

ETHEREUM — It’s an open-source, public, electronic transaction ledger that enables developers to build blockchain applications with business logic within an NFT network. As such, NFTs open the door to a global financial system where an Internet connection is all you need to access applications, products, and services that operate in cryptocurrency. Anyone can interact with the Ethereum network and participate in this digital economy without third parties.

RELIABILITY — To summarize this somewhat “ethereal” subject, NFTs are digital tokens that cybernauts can use to represent ownership of unique items. They let investors “tokenize” things like art, collectibles, even real estate. Objects can only have one official owner at a time, and the Ethereum blockchain secures them. The blockchain’s function is to prevent anyone from modifying the record of ownership with a copy/paste tactic or a psuedo non-fungible token. So, it’s all quite secure.  

Author Details
Author Rafael Matos is a veteran journalist, a professor of digital narratives and university mentor. He may be contacted at cccrafael@gmail.com.

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