What Journalists Should Know About NFTs
Non-Fungible-Tokens (NFTs) have exploded in the past year. From Virtual Land, your ticket to the metaverse, to cartoon monkeys selling for half a million dollars, the space has certainly seen its fair share of attention. But the debate remains: Are NFTs worth the money, and, with that, the hype that surrounds them? There are experts on both sides of the argument. Some say it’s a bubble waiting to pop. Others believe NFTs are here for the long run and expanding in value exponentially.
The main question you probably have is, “What is an NFT?” NFTs are a unique and non-interchangeable piece of data stored on a digital ledger using blockchain technology in order to prove ownership. Photos, films, audio, and other sorts of digital media can all be represented using NFTs. Comparable or very similar technology is used for cryptocurrencies like Bitcoin and Ethereum to assure the uniqueness of each NFT and provide verification of possession. But unlike a unit of Ethereum, a platform powered by blockchain technology that is best known for its native cryptocurrency, each NFT is 100 percent unique. This means that there is no financial parity and it cannot be exchanged one to one.
The NFT is a file that stores additional information that elevates it above the cryptocurrency that it is built upon. Consequently it is viewed as more advanced, with greeted flexibility and therefore more solid value, which moves it to the realm of pretty much anything.
Simply stated, NFTs are digital assets which represent internet collectibles such as art, games, music, and more. They are validated with an authentic certificate which can be created by blockchain technology that underlies cryptocurrency. Technically speaking, NFTs are a new asset class. Because each NFT has its own transaction hash, a unique string of characters that is given to every transaction that is verified and added to the blockchain, it is non-replicable. All transactional data is collected and stored in blocks, eventually forming a blockchain. This data is kept indefinitely and is open to public inspection and verification, and transaction hashes are neededto locate funds.
After exploding in the art and gaming worlds in multi-million dollar auctions, NFTs have now made their presence mainstream, attracting the interest of huge brands and celebrities alike. For example, the footwear company Adidas created NFTs in collaboration with The Bored Ape Yacht Club, an NFT collection built on the Ethereum blockchain. Pieces created as part of this project are currently going for hundreds of thousands of dollars. Other major brands, such as Coca-Cola and McDonald’s, have also joined in and released their own collections.
Whether you have decided they are just a bubble waiting to burst or an amazing new opportunity for artists and creatives alike, you can not deny that NFTs are making headlines, as well as making a lot of people very wealthy. In further articles, I will subsequently describe how NFTs work, how they are made, how they might impact our future, and why it benefits journalists to know about them.