EMERGENCE OF CRYPTO ART - NFTs - Akshul Agarwal

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You may have heard that the first tweet of the Twitter CEO is getting sold! Or digital art is sold for $69 Million, and you must surely be wondering about what the craze is about. All this is possible due to the weird, yet emerging technology called Non-Fungible Tokens. NFT has gained massive popularity in recent times and is becoming quite popular in the cryptocurrency world. In this article, we will understand the growing hype of NFTs among people and how can people buy something like a ‘tweet’.

What is NFT?

NFTs are unique assets that can’t be interchanged with something else and are stored and verified with the use of blockchain technology. In other words, we can trade one cryptocurrency for another, which makes them fungible. But NFTs cannot be replaced with one another for similar items. They include almost everything from music, pictures to a website domain, but the recent trend has been around digital artwork.

Now, you surely must be thinking that if anyone can record these files, so why people are willing to spend such a huge amount on buying this ‘publicly available’ art? But the catch here is that through recording you are only creating a copy of this art. The real ownership remains with the buyer, which with the help of blockchain can be verified. NFTs just prove the ownership over a digital asset and is not a copyright. The market size of NFT has exceeded $10 billion in volume this quarter.

The thing about NFTs which make them unique is the fact that they are non-fungible. For instance, everything we hold around us can be easily bought again and are fungible. But NFTs only exist in digital form and are the creation of their owner which can’t be replaced. Two NFTs are never identical, even if they exist on the same platform.

History of NFTs

The idea behind NFTs was started in 2014 when Counterparty was founded and built on the Bitcoin blockchain. It garnered traction from projects like meme trading and card games. Afterward, CryptoKitties and CryptoPunks launched in 2017. At one point, people were trading and breeding virtual cats which went viral, with the kitties selling for around $100k. Later, Nike also tried NFTs to verify the authenticity of physical sneakers. And in 2021, the NFT hype increased significantly with the sale of the Nyan cat meme and Jack Dorsey’s tweet. It has gained popular attraction in the digital space by holding the potential to digitize unique physical assets.

How do NFTs work?

As we have discussed, you may have a basic idea that the trading of NFT is done through blockchain. Popularly, most NFTs are part of the Ethereum blockchain, it ensures that only authentic people can own these digital arts. Anyone can buy, sell, or create NFTs, and these are stored in an encrypted peer-to-peer network which makes it difficult for someone to hack. Whenever someone purchased an NFT, they will receive a certificate issued by Blockchain technology which represents that they are the owner of it.

Application of NFTs

With its growing popularity among the masses, its use has also increased beyond its conventional means. In art, initially, it was used to tokenize the digital arts for authentication. But now NFT auction has increased where it allows users to view the entire history of art which includes previous prices and owners. In fashion, it is used to verify the originality of luxury items so to avoid counterfeit. This has also helped in reducing carbon emissions. In Licenses & Certification, these are used to tokenize to preserve ownership. For instance, imagine getting your degree through blockchain, it could be digitally stored and is authentic. NFTs application in other domains also has started gaining traction and is constantly growing.

What is the future of NFTs?

Just like cryptocurrency, NFT is the new growing fad among artists and collectors. The use of blockchain is a major advantage over physical art. With the increasing technological advancements, it will soon be time & cost-friendly to use these tokens. Hence, I believe that its application would further diversify in different areas. 

In India, it’s a fairly new concept and it might take some time to get popular. According to me, India has lakhs of traditional artisans who could be benefitted from this to verify their original artwork. Also, a growing number of budding artists in the digital space can leverage this to protect and monetize their creations. It opened a lot of opportunities for them to showcase their work at a global scale and become recognized. With time, NFTs will become popular as some artists have started to discover this unique cryptocurrency. 


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