NFT or non fungible tokens, are tokens that represent a unique digital asset on a blockchain. NFT’s main function is to track ownership and authenticity in the digital world where items are infinitely reproducible. They are a cryptographic collectible and allow for digital items to have scarcity and be collectibles.
Prior to the creation of blockchain technology, digital items were not scarce. For instance, music, videos and images could be blasted across the internet and downloaded for free. However blockchains allowed for digital items to be tracked and authenticated, thus allowing for digital scarcity.
NFTs are special in the world of cryptocurrencies and blockchains. NFTs have a layer of uniqueness that other blockchain assets do not have. NFTs can store extra information that differentiates one NFT from another allowing for extreme scarcity of digital items. Additionally NTFs are easily verifiable. Thanks to blockchain technology it is impossible to counterfeit a NTF as the transaction history from the creator to the holder is immediately verifiable.
NFTs have the following key characteristics that make them valuable:
Non-Interoperable: NFTs are unique to their ecosystem, a NFT designed for use in one game cannot be used in another.
Indivisible: NFTs cannot be broken into smaller pieces, like Bitcoin breaking into satoshis. They are always in whole units.
Indestructible: The minting of NFTs starts their existence on a blockchain and from that moment onward the NFT will always exist.
Immutable: Owners of a NFT own the NFT outright. If a game uses NFTs for in-game items, the player who owns the NFT has immutable ownership of it and can sell it on outside sites. Pre-blockchain, digital items were largely licensed like when you buy music from the iTunes store. You don’t own the music, you are just licensed to listen to the music. NFTs allow for true ownership of a digital asset.
Verifiable: the blockchain tracks the ownership of the NFTs allowing authenticity to be immediately verified without a third party needed. This differs from a title company for real estate possession. The third party title company is needed to verify the ownership of the home. NFTs do not require any third party verification as the authenticity is tracked with the token.
As with most art, the majority of NFTs will have little to know value, and Curios is here to help you determine which NFTs have value, and which NFTs have a high potential of holding value. Curios tracks thousands of NFTs and their price movements to understand how valuable it is.
NFTs will play a large role in providing authenticity and scarcity in the ever digitized world and Curios is here to help you navigate this fascinating and sometimes confusing technology.
Things To Watch Out For
Not all NFTs are weighted equally...
Some NFTs have no copyrights associated with them
Some have no exclusive access to the work, meaning the original artist can mint more NFTs of the same work
Some NFTs do not come with possession of the original digital file
Some NFTs are not uploaded by the original artist or are minted without the original artist’s permission or knowledge