NFT: what are the famous non-fungible tokens used for?

A new technological concept that is creating a buzz, NFTs are mainly decried for the volatility of their value, the many scams that result from them and their supposed uselessness. Really ?

Since 2021, it has been the buzzword. NFT, for Non Fungible Token, a non-fungible digital token, i.e. non-duplicable and completely unique. In December 2021, artist Pak sold his digital work The Merge for the record sum of $91.8 million on the online auction platform Nifty. In March 2021, Jack Dorsey, the founder of Twitter, sold his first message posted on the social network in NFT for the modest sum of 2.9 million dollars. A year later, on April 6, 2022, its new owner, Sina Estavi, wanted to put it up for auction for $48 million. Alas, a week later, the best offer was 280 dollars. To date, the best offer is 10.3 Ether, or just under $30,000. From this, one could conclude that NFTs are only intended to trap pigeons attracted by speculation. But that would be a bit too simplistic a shortcut.

NFTs are not just art

Admittedly, if we summarize NFTs as a pseudo-digital work of art sold at a price of gold, the concept does not make much sense, but, digging below the surface, the answer is different. Let’s go back to the initial concept: Non Fungible Token. This digital token is therefore unique, but it can come in different forms. It is not necessarily a JPEG image. It could just as well be a piece of music, a film, an SMS, a GIF, an accessory in a video game or even a piece of computer code, for example.

A tennis player, Oleksandra Oliynykova, even sold an area of ​​his skin – 15×8 cm on his forearm – in NFT. An area on which she has agreed to be tattooed or put a temporary design at the choice of the new owner. This right to life, which can therefore be resold according to the principle of NFT, is accompanied by two restrictions: no gambling or extremist apology. The NFT was sold for 3 ether, the equivalent of 5,900 euros during the sale.

©mundissima/Shutterstock

NFTs also promise to be essential in the metaverse. They are already used in virtual worlds like The Sandbox or Decentraland, as proof of ownership of virtual land spaces. Thus, in November 2021, a plot of land from Decentraland sold for the equivalent of 2.4 million dollars (2.3 million euros). The reason for this particularly high sum? This plot is located in the “Fashion Street” of the metaverse. A little as if a building on Avenue Montaigne in Paris had been sold at auction. This NFT therefore functions as a deed of ownership. Unique by its location, all its characteristics (dimension, location in Decentraland) are recorded in the blockchain.

NFTs, unique tokens that can contain a large amount of information

Just like the case of this plot of land in Decentraland, we can imagine an NFT which will serve as a title deed to a dwelling, indeed real, him. After all, an NFT is neither more nor less than a digital file in which can be encapsulated both a work of art and the precise characteristics of a luxury watch (serial number, date of manufacture, materials used and their sourcing, place of manufacture, name of the watchmaker who assembled it, etc.). Same for real estate.

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“CryptoPunks” is a collection of non-fungible tokens on the Ethereum blockchain.©Rokas Tenys/Shutterstock

An NFT could completely replace the notarial deed. With the advantage of being able to access it from anywhere, without the risk of it disappearing or being damaged in the event of a fire, for example. Because, once this file is registered in the blockchain, the NFT has its certificate of authenticity and becomes traceable ad vitam æternam. It will therefore become possible to see how many hands have passed the luxury watch, the house, the work of art, etc.

To invest or not in NFTs?

This is the question everyone is asking. If the goal is to become rich in a snap of the fingers, it is better to move on. As seen with the first tweet in the story, the volatility is such that speculation is extremely high. By investing in NFTs, you automatically take the risk of not recovering your investment one day.

The approach, on the other hand, has its interest if you have a real interest in a work of art or a unique project. But all of this should be taken with a grain of salt. As Caroline Jurado (Les Cryptos de Caro) explains: “At this stage, there are far too many in all directions (…). I think it’s something that will be very useful in the future, but also that it’s worth waiting a bit for all the projects that are only there for marketing to fail, to be able to more easily identify the future plans. » You have been warned.

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NFT: what are the famous non-fungible tokens used for?


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