Written by: Lotta Spjut, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
These days, you have probably heard of NFTs, non-fungible tokens. But, maybe you don't understand all the buzz around it. So, I hope, You will understand a bit more after this article.
In my last article, I was writing about Metaverse and how technology has created opportunities around us in the previous decades. NFTs are another of these opportunities.
Twitter's CEO Jack Dorsey made headlines selling the first-ever tweet as an NFT for $2.9 million. In March 2021, the "Everyday's-The first 5 000 Days” from the digital artist ‒ Beeple was sold for an insane $69 million. “The Merge” (a digital artwork) from Pak officially became the most expensive NFT ever sold on December 2, 2021, with almost 30 000 collectors going together for a total cost of $91.8m.
NFTs have become a new type of investment, and it has taken the world by storm turning digital artworks and collectibles into easily tradable items on the blockchain. The interest is multiplying, and You can find celebrities, artists, fashion ‒ and other big brands entering the NFT world. However, it is not only for the “famous” people. NFTs are also creating exciting opportunities for teenagers, ordinary people, all kinds of creators (musicians, visual arts, game designers, etc.) and unlocking new revenue streams. One of the exciting parts is the variety of assets NFT can represent: digital artwork, virtual collectibles, game times, real estate, even tickets, certifications, identity documents, only to mention a few.
2021 NFT increased to a $41 billion market (according to Financial Times) and is expected to grow much more this year and in upcoming years. We can already see digital museums with NFT art collections and luxury fashion houses like Gucci and Luis Vuitton launching virtual fashion exhibitions. Statistically, the NFT market can be a $1 Trillion Opportunity. The global collectibles market alone is today worth almost $400 billion. With the fine wines, classic cars, comics books, fashion, and other collectibles that have already earned places in collector museums and homes, once you add all artworks ever produced in the total values, the figure likely tops $1 trillion. So, it might be worth putting in some time to learn and understand more.
Getting to know and understand NFTs is the way to catch the opportunity. However, before that, it is good to understand some other tech terms like blockchain, cryptocurrency, and the Metaverse. (If You lack that basic knowledge, read my last article about Metaverse, and in my next article, I will give You some basic understanding of what a blockchain is).
Now, let's move into the world of NFTs.
So, what is NFT?
To answer that, You need to know what is a (crypto) token.
Tokens are using the blockchain to transfer, and it is digital, and its primary function is not being used as money since they are designated for a function and cover many meanings.
All tokens are split into two types: Fungible Token (FT) and Non-Fungible Token (NFT). Any asset can be categorized into four groups.
Non-Fungible Token (Intangible): A digital asset that is unique and with an ownership/certificate stored on a blockchain. You cannot touch it physically, and it cannot be exchanged interchangeably ‒ for example, one CryptoKitten NFT is not exchangeable with another CryptoKitten NFT even if they are both from the same NFT collection.
Fungible Token (Intangible): A unique digital asset with an ownership/certificate stored on a blockchain. You cannot touch it physically, though it is mutually interchangeable and hold the same value even when exchanged ‒ for example, if You buy $100 BTC, it only matters that You get the BTC to Your wallet, not what specific BTC.
Non-Fungible Asset (Tangible): A physical asset You can touch, such as paintings, houses, or classic cars. These cannot be replaced ‒ for example, two Picasso paintings, though similar in aesthetics and value are unique and unexchangeable. Because of this, these assets can also become an NFT with unique stored ownership on the blockchain.
Fungible Assets (Tangible): A physical asset You can touch. Such as dollars or gold that are mutually interchangeable and hold exact value when exchanged ‒ for example, swapping a $10 note for two $5 notes.
The unique part in NFTs is written inside the token’s metadata (stored in the blockchain) and considered permanent and cannot change the authenticity certificate. Therefore, they are beneficial as proof of ownership or proof of asset. NFT can tokenize almost everything, the most common use cases (so far) include:
Digital art and music, virtual assets and addresses, gaming items (rare weapons and attributes), collectibles, tokenized luxury goods (fine wine, classic cars, etc.), and real-world assets (ownership).
Why NFT and why now?
Have You wondered why suddenly social media is full of people sharing about NFT and what its use of it? It aligns with the technology era we are in and about timing. Though essential aspects are connected, NFT can prevent fraud and forgery through traceable digital information like the assets' ownership recorded in the blockchain. Three characteristics make NFT the perfect tech for this work:
Easy to trace- As You learned by now, the blockchain’s data is transparent and open. It offers an innovative way to store patents, contracts, and other documents where users truly own their data, which is applied to NFT too. Anyone can check or view ownership history, time of issuance, source, issuances’ number, and much other information for each NFT. In addition, anything valuable can be tokenized by NFTs, building a connection between value and information.
Hard to forge- It is hard for owners and creators to claim their digital rights, and it is easy to replicate digital prints. Anyone can easily share pictures, music, and videos with others without actually being its owner. To create a fake identity of any asset is also quite simple. With the help of NFT, artists and owners of digital assets can protect their artwork and prevent them from being forged.
Increase circulation- The gaming industry is enormous and increasing. The virtual treasure's value a gamer bought is locked within the game company's server in traditional gaming. If the company stops operating, the gamer will lose the right to use the virtual treasure. If the game is a blockchain-based NFT game, the gamer will obtain the games' actual ownership and freely trade their NFTs in the marketplace, which increases their circulation significantly. And even more importantly, it only takes a few minutes to finish the cross-border NFT transactions. The possibility of fraud will also be eliminated.
You might think that NFT is some new invention, though not. Already 2012, the very first known NFTs was born, Colored Coins. They laid much of the NFTs’ groundwork and opened the door to NFT’s further experimentation. Two years later came Counterparty, a peer-to-peer financial platform. In the upcoming years, they collaborated with game creators, and in Oct. 2016, people started to issue “rare pepes” as assets on Counterparty. 2017 was, two NFT creations released, CryptoPunk and CryptoKitties. With their limited amount and early collection, four CryptoPunks are in the Top 10 list of most expensive NFT's ever sold. These four were sold for between $7,8- $23 million/each! 2018-19 the NFT started with massive growth, and hundreds of projects started. Since 2019, the NFT market has increased to today's $41 billion, as I mentioned initially, and continues to grow rapidly.
So, with this said, I hope You got an overview of NFTs and an understanding of how technology plays a significant role in our lives, whether we like it or not. We have in the last decades adapted, some of us early and some when we need to. If NFT is something for You, it is not up to me to decide because I am neither a financial adviser nor an NFT expert. Though, if You feel like You missed the cryptocurrencies train, will you also leave this opportunity?
We already see that NFT is one of the favorite areas for “investment” in 2022 (started already 2021). In the eye of the beholders, digital art is valuable, and NFTs make it possible even to own Your virtual land and properties. The whole virtual world is getting the monetization that users have long dreamed of.
There is even an NFT strategy game, Planet IX, where You can own Your virtual land areas and help to clean up the virtual world from waste. When you do that, You get rewarded in actual money, and the gaming company lets some of the revenue fund real sustainability projects in the real world. How cool is that?
We will probably see more physical "things" getting traded via NFTs. Hundreds of sites have claimed to produce authenticity certificates for everything in the physical artworks, from autographs to paintings. It’s easier than ever to trade and authenticate these collectibles by securing all that on a single blockchain.
Still, NFTs are a relatively new type of investment. Some have been sold for tens of millions of dollars. Though there are also thousands of NFT's out in the markets, there is a lot to learn because this is not a place to rely on luck. Many scammers find their opportunities to use people's lack of knowledge.
To summarize, only You can decide whether NFTs will be a business opportunity for You or not. This article might have opened a curiosity to learn more and if You choose to invest in NFTs, set your spending limit and only buy what you can afford to lose, as in any investment. As mentioned, NFTs are highly speculative, so don't expect to get rich as soon as You go into it. But, as you have seen now, the NFTs' future looks very bright. Suppose You are ready to explore and learn, for sure. In that case, it can be an excellent outcome, and remember that You are still a very early adapter and history shows that being early in the technology space is most often a perfect thing. And You have one more option, and if You do not have an investment interest, You might be the one that creates your own NFT's for someone else to invest into.
To learn more from Lotta, you can visit her website and connect with her social media accounts; Facebook, Instagram, Twitter and Linkedin. Read more from Lotta!
Lotta Spjut, Executive Contributor Brainz Magazine Lotta Spjut has a passion and drive to inspire and empower people, especially women around the Globe. To use the skills they have, learn new skills and knowledge to grow themself, and become successful individuals and/or entrepreneurs.
She has made hundreds of lectures, speeches, and individual and group training for private and public companies, built on empiric knowledge. Sharing what she has learned and experienced herself to inspire and empower people. Not to compare with her or anyone else but to get inspired. The amount of listeners is not important for her; it is what each person gets out of it.
Lotta is a TEDx speaker, and she was one of 20 Global Women Leaders to Look up to 2021 by Passion Vista & Unified Brainz. She was also selected for Brainz 500 Global Awards 2021” by Brainz Magazine as one of the "500 Global Companies and Influential Leaders recognized for their entrepreneurial success, achievements, and dedication to helping others”. 2022 she got selected for "Who´s Who of the world" and got her own Coffee Table Book.
Lotta’s main business over the last decades has been as a Business Developer, Global Speaker, and Trainer. She has thousands of people all over the world whom she has mentored and educated in leadership, personal development, technology, and entrepreneurship.
Her background is as an Experienced Chief Executive Officer with a demonstrated history of working with leadership. She was an employee for 10 years before she resigned and became her own boss. Master's Degree in Didactic, Bachelor of Education, and many years of experience as a teacher in elementary school and at University. Certified Business Pro Executive Coach, coaching CEOs in different businesses. Bachelor's degree as a health and nutrition developer. Educated people in the health, nutrition, and fitness industry.
Lotta is skilled in Leadership, Coaching, Entrepreneurship, Team Building, Education, and Management. Strong business development and 2015 she started to educate herself about cryptocurrency and blockchain technology and the latest area she is developing her knowledge in is the NFT- and Web3 markets. Lotta’s mission is to help more people understand and get educated about the opportunities within the innovations in technology and web3. She especially wants to inspire and empower more women to learn more about web3.
Her favorite quote is from Arthur Ashe: "Start where You are, use what You have, and Do what You can"! And "You don´t need to be great to start, but You need to start to be great".
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