Understanding the NFT revolution

For the past few months, the 3 letters you have heard the most if you are a little interested in the world of Crypto Currencies, are NFT.

These intangible digital works are revolutionizing the way you understand title deed. Who would have thought, only 1 year ago, that Crypto Punks, Bored Apes or digital Comic Books would be able to sell several hundred thousand Dollars as soon as they were put on the market.

NFT stands for Non Fungible Token, non-fungible tokens for French language purists. Behind this somewhat barbaric acronym hides a world that is taking off, and which will very quickly be essential. Whether or not we understand their interest, they are considered by many to be the new digital “Eldorado”. But how do NFTs work? What does it really offer? Will the trend surrounding these digital works and the proliferating projects break the dynamic? How to avoid making mistakes and invest in the right project? It is true that it is difficult to imagine that some people are ready to invest thousands of dollars on simple digital images. To fully understand, we must return to the operation of the blockchain and the famous Smart Contract, these famous Smart Contracts.

An NFT is a cryptocurrency that stores information on the blockchain. This info is:
– Transparent, anyone can look at it or have access to it
– Immutable, no one can modify it
– Indisputable. The Blockchain having validated the information entered, it is irrefutable proof of its authenticity.
– Unique: There are no 2 identical NFTs, if only by their serial number.
– non-replicable: It is not possible to copy an NFT. And taking a screen shot of your phone screen doesn’t count!
– Not Divisible: Although some works such as Gustav Klimt’s Kiss, were sold in 10000 NFT, each NFT in this case represents a part of the original work.

The NFT is therefore a very useful element of the blockchain… but still it is necessary to make something useful out of it. Because for the moment, it’s a bit of a rat race, and its use is going all over the place. Its use should not be limited to digital art. But the ease with which it is possible to post your own NFT leaves far too much room for clever little guys who post photos or drawings far enough away from concept art or a real project.

One of the latest uploads is that of an NFT signed by McFly and Carlito, the well-known younger duo during a dice video with youtuber Squezzie. Following a die from Hasheur, a cryptocurrency and blockchain specialist on Youtube and BFM Business, a very childish drawing was posted and put up for sale on OpenSea, one of the largest NFT sales platforms. What saves this NFT entitled “West la Zone” is that it was put up for sale for the benefit of the Secours Populaire. But it shows that anyone can post an NFT, and with a buzz and an active community on social media like Discord, make it gain a lot of value, very quickly, without any real talent or purpose.

I will not list the projects without any interest which have taken enormous value when they were put online, but which have gone the other way even more, but there are many of them. As in any investment, and as I repeat in my training on www. potentialfinance.com.

Bet on sure values

From my point of view, there are only projects that are based on safe values, which can last over time. The Veve platform has understood this well, since it only offers NFTs around American and Japanese Pop Culture. Owning StarWars, Disney or even luxury brand NFTs such as Givenchy gives more weight than a Pixelmon project, the latest failure of a (too?) ambitious project. However, if NFTs are used well, they can, in the very short term, regulate and revolutionize the world of intellectual property and copyright. And I think the challenge lies here… and not in the random creation of digital art. The NFT makes it possible to manage the use of a work, and to remunerate its author (or its owner) for each of its uses. Revolutionary, right?

This is not the case today, but it can be fully integrated into the smart contract. As in any classic contract between 2 parties! The NFT therefore becomes more than a speculative tool, but an investment, which can earn us money when used by others. The most frequent use of NFTs today is to join a very select club. Example: When you own a Bored Apes, you can enter into exclusive contact with the other owners. To stay in the artistic world, we will see in the coming months the establishment of a business around derivative products.

Thanks to NFTs, it will be possible for artists, major events such as festivals or sporting events, to offer privileged access, bonuses… the singer Orelsan and the Belgian singer Angele, recently offered 6 Golden Tickets, hidden in their albums for lifetime access to all their lifetime concerts!

The resale market

It is quite feasible, thanks to NFTs, to do the same thing, digitally! It will also be possible thanks to NFTs to control the resale market. Producers and organizers of events (them again!), are fighting against the resale of tickets for concerts or football matches at much higher prices. Thanks to NFTs, a percentage could be automatically redistributed to them or even give them the possibility of controlling this resale, by limiting the resale price, or even the number of times it is resold! Ditto for music or video games. Offer additional song versions, exclusive bonuses, or even digital addons thanks to NFT, to extend the life of the product. You understand, the options offered by NFTs are in nite. Everything can be integrated into a smart contract.

But like any new market, derivatives and scams are devised to make money even faster. It’s a pity, it places even more reluctance and can delay its adhesion by the general public. According to a recent survey, barely 8% of the French population has already invested in cryptocurrencies… the figure must be barely 1% for NFTs. It is likely that the Metaverse projects initiated by the greats of the Silicone Valley, will allow a rapid acceleration of their adoption. WAIT AND SEE… but the (digital) world of tomorrow is already underway!

Arno Bitan

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Understanding the NFT revolution

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