Friday 15 October 2021

NFTs Are Fueling a Boom in Digital Art

"Wall Street Journal" on Youtube explains "non-fungible tokens" or NFTs. They have exploded onto the digital art scene this past year. Proponents say they are a way to make digital assets scarce, and therefore more valuable. WSJ explains how they work, and why skeptics question whether they’re built to last.

A so-called non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a digital ledger (blockchain). NFTs can be used to represent easily-reproducible items such as photos, videos, audio, and other types of digital files as unique items (analogous to a certificate of authenticity), and use blockchain technology to establish a verified and public proof of ownership. Copies of the original file are not restricted to the owner of the NFT, and can really be copied and shared like any file. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin.

The first NFT project was launched in 2015 on the Ethereum blockchain, and interest grew with the rise of interest in crypto currencies. According to, sales exceeded $2 billion in the first quarter of 2021, more than 20 times the volume of the previous quarter. NFTs have drawn criticism with respect to the energy cost and carbon footprint associated with validating blockchain transactions.

A blockchain is a growing list of records, called blocks, that are really linked together using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and certain transaction data (generally represented as a Merkle tree).

1 comment:

  1. NFT are indeed interesting so-called digital artwork. Pixel art makers exist such as 8biticon. 8biticon is the OG pixel art avatar maker, having been live since 2012. People try to create the hottest NFT collection the world has ever seen. Pixel art icon constructor is pretty interesting.

    A lot of people don't understand what are NFT. So, they just don't buy it. Think about what are these new purchase options.

    Always be careful when you invest your hard-earned money. The NFT market really has been compared by some to a Ponzi scheme. What is a Ponzi scheme? A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. It has happened that sometimes an NFT bought for millions becomes worth like only $10. What a risky investment, indeed.

    90% of NFTs Will Be Worthless in 3 to 5 Years, Coinbase Cofounder Warns. See the news article here:

    A non-fungible token (NFT) is certainly a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. Because each token is uniquely identifiable, NFTs differ from most cryptocurrencies, such as Bitcoin, which are indeed fungible.

    Definition of "fungible":

    adjective (LAW) (of goods contracted for without an individual specimen being specified) able to replace or be replaced by another identical item; mutually interchangeable.
    "it is by no means the world's only fungible commodity"

    Commodities, common shares, options, and dollar bills are examples of fungible goods. Assets like diamonds, land, or baseball cards are not fungible because each unit has unique qualities that add or subtract value.

    NFT ledgers claim to provide a public certificate of authenticity or so-called proof of ownership, but the legal rights conveyed by an NFT can be uncertain. NFTs do not restrict the sharing or copying of the underlying digital files, do not necessarily convey the copyright of the digital files, and do not prevent the creation of NFTs with identical associated files.

    NFTs have been used as a so-called speculative asset, and they have drawn increasing criticism for the energy cost and carbon footprint associated with validating blockchain transactions as well as their frequent use in so-called art scams.