Recently, there has been a massive discussion about Non-Fungible Tokens, or NFTs. This concept is not a very new one, but it has now taken off more than ever before. In short, an NFT is a digital asset that is non-fungible and can be anything that can be digitalized. Some of the most popular NFTs are things such as basketball cards, songs, videos or any type of digital art, but digital real estate, tweets and rights (property rights, etc.) as well.
For most people, the term “non-fungible” is a new one, but it does not describe a highly complex concept. Non-fungible comes from the field of economics, where it refers to something that cannot be traded or exchanged at equivalency. For a better understanding, one can always keep a simple example in mind: money is fungible, as a $50 bill can be traded for 5 $10 bills, but a work of art is non-fungible, in that you cannot say that a Picasso is worth two Duchamps. This is a simple way of understanding it, but it is actually a bit more complex, in the sense that some things can sometimes be fungible, and at other times, they are non-fungible. Gold is a good example of this.
The reason why NFTs are such a big draw these days is because new blockchain-based technologies now allow a way of encrypting unique identification codes and metadata that are related to a digital (or physical) product like never before. What this means is that by using blockchain, which is an (almost) immutable technology, people can certify that an asset, and especially a digital one, is not sold twice. For example, if someone buys a digital photograph, he will be the owner of it, and he will be sure the photo is not sold a second time (unless it is stated so from the very beginning). This system finally makes buying and selling digital art relevant, as, until now, the digital world was full of scams, and this made many art buyers disinterested.
The interest for NFTs has been massive, as people from all over the world have recently bought and sold pieces of art or other goods/assets. Some of them even sold for millions! Many artists are now selling their music or visual art on digital marketplaces such as OpenSea. Even Elon Musk got into it and announced recently that he is selling a song about NFTs as an NFT.
What NFTs do is that they allow people to be a part of culture, by owning bits of the web, which sometimes have a physical equivalent (for example, you can also buy sculptures or paintings as NFTs, which you will then receive at home).
Many people are wondering whether this will change the web – will meme creators be remunerated for creating works that are seen by millions and will musical and digital artists finally break free from many of the constraints they were currently facing, such as not having a serious way of doing business online. For now, the costs of launching your NFTs into the web are still somewhat high for some, but it is likely that they will go down in the near future, as it happened with many past technologies. What is also interesting about NFTs from a cultural analysis point of view is that people are now talking very much about value and what actually constitutes a reasonable cost-to-value ratio.
The world of NFTs is still too new to tell whether it’s a flash in a pan or a new revolution in art, and, if so, if it’s a good one. Nevertheless, it is a noteworthy cultural phenomenon.