Non-fungible NFT single token technology
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Not long ago I remember being overwhelmed with suggestions for new blockchain-based music delivery systems. The promise to music artists was, “You can afford anything you want for your music,” and “Take all the money instead of giving your record label. “He got to the point where, instead of just labeling blockchain as a core technology for what they offered, he named it a feature. After a year of unfulfilled prediction, only the blockchain reference put the suggestion in the “next” file. If the people at registration forms were not already very clever in using the technology, it may not have been “there”.
Basics NFT
February 2021 has focused new light on the technology however, this time in the form of NFTs, or Non-fungal Tokens. An NFT is simply a record of who owns a particular piece of digital content. That content can be from anything from art, music, graphics, tweets, memes, games – you name it. If it’s digital and it’s created, it can be an NFT. It’s ‘non-fun’ because it can’t be easily exchanged for something similar at the same price.
When someone “analyzes” an NFT, they create a file that resides on the blockchain. The beauty of this technology is that once that happens it cannot be copied and handed out, edited, erased or otherwise manipulated. It is the original creation, and although copies of the work can be made and distributed, they are not original and therefore of less value.
When people think of blockchain, they immediately think of Bitcoin, which is also built on the technology. NFTs use a different cryptocurrency called Ethereum though, which means you have to buy Ether first to buy NFT.
The promise fulfilled?
We recently saw a digital flower NFT sell for $ 20,000, a curved video clip for $ 26k, and a LeBron James stocking and clip for over $ 100k. Even Nike
NKE
The electronic music producer sold 3lau 33 NFTn for a total of $ 11,684,101, which included a reusable platinum-plated vinyl record for a standard song by the artist as well as access to unpublished music and bonus physical vinyl disc.
Daft Punk released several collectible NFTs on the Rarible platform before announcing that they broke up. Grimes sold 10 pieces of art, one for nearly $ 400,000, and the secondary (thriving) market for the works brought in $ 2.5 million. Mike Shinoda at Linkin Park sold a digital artwork for $ 30,000. Many artists, seeing the potential revenue, are interested in pursuing a suit.
One of the most appealing things to artists is that NFTs offer a continuous payment beyond the initial sale. If the token is sold later in a secondary market, the creator will receive 10% of the purchase price, which will follow for any subsequent sale of the token.
There are costs
Most entrepreneurs saw blockchain as a way to democratize pay-per-view, where the average artist could finally make a buck as easily as superstition. NFTs prove to be just the opposite, as they are the only high-profile artists in any entertainment field that seem to be turning their backs so far.
Not only that, there are costs involved. According to industry analyst Cherie Hu, the cost for NFT mint is at least $ 70, which means the price of the token would start somewhere in the region of $ 100. This is because the online sales platform will take anywhere between 3 and 15% of the transaction for the first sale, with a typical 10% fee for secondary sales.
This high first price means the token isn’t going at all for the average fan, who is quickly getting a price out of the market. NFTs seem to be for super-fans only.
But a potential problem is the fact that minting NFTs, and cryptomedia in general, are very energy intensive, and as a result, pose a significant risk to the environment. For example, in 2018 it is estimated that Ethereum mining alone used more energy than the entire Icelandic country to test its blockchain. While a new, more energy-efficient method is promised, for now the process is nothing but carbon-neutral.
And there are concerns
NFT sales raise a number of very common issues that are easily addressed in the non-crypto world that don’t seem to be thought through here. For one, how are kingdoms measured and paid? While the artist is benefiting from the sale, how are co-writers, publishers and producers compensated?
Copyright issues are another concern. There is currently no platform authentication to prove that the token maker is the owner. What happens if someone decides to create an NFT of something they don’t have?
NFTs are certainly the hot trend of the day and that is more likely to continue. It’s a good practice for blockchain as it fulfills its promise of being a revenue generator for creators, but it’s not perfect with a long view. We are in for an exciting journey.