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Hey you,
The NFT market has been exploding in popularity for a few months now, but what is NFT anyway? These three letters are on everyone’s lips and it’s of particular interest to us, the passion economy players. Do you know the CEO of Twitter, Jack Dorsey? Well, he put his first tweet up for sale for 2.5 million dollars. The Canadian artist Grimes, for her part, would have put up for sale a whole collection of digital works for nearly 6 million dollars. As you can see, NFT is a technology that allows you to buy and sell digital objects: videos, images, sounds or even virtual works of art. In this world where dematerialized products are becoming unique, Passion média explains everything.
What is the NFT?
In concrete terms, the NFT is a virtual file that represents a digital object such as an image or a video. The NFT will act as a certificate of authenticity for the purchase of a good and will be stored on a blockchain. Basically, when you hold an NFT, you actually get data that certifies that you own it but not the object itself. For example, in the case of a very popular video of Nyan Cat, that of a cat in space, the NFT was sold for 500 000 dollars, and to this day, the video is still shared online by Internet users.
What do you buy with an NFT?
Finally, an NFT can be used as a certificate to buy just about anything, but where it makes sense is for digital works. Technically, it is possible to buy the certificate of a pair of famous sneakers or a master painting, but how to prove that you are the owner of this digital asset, such as the purchase of Jack Dorsey’s first Tweet?
That’s why since 2021, the NFT is a real revolution in the world of digital art because now, any creation can be recognized as a unique work and especially identified. Beyond the art world, NFTs are also making a noticeable intrusion into the entertainment sectors such as music with artists like Booba who release tracks only available in NFT or even video games and sports. For example, on Sorare, a start-up specialized in video games, the principle is simple: you can create fictitious soccer teams by buying virtual cards bearing the likeness of real players and then score points according to their real performances. If it is possible to play without NFT (with your credit card or without spending money), Sorare clearly displays its ambitions: to become the first NFT sports entertainment group in the world with the conviction that the particularities of NFTs such as digital scarcity and traceability will soon lead to a technological change as important as the arrival of the internet or the smartphone in our lives, thus positioning them as precursors on this market.
Why buy a GIF rather than copy it?
Good question! What’s the point of spending $500,000 on a GIF or any other digital work when you can get it for free on the net? Imagine a collector of rare and valuable paintings who displays his multi-million dollar works in his living room. Well, owning your digital work via NFT is simply for the same reason as this art collector, the love of art and the pleasure of owning something unique. With a few clicks, you will find lots of reproductions of paintings but even with a good printer, you will never own the work of that artist.
What are the limits of NFTs?
The sudden surge of the NFT market raises technical, ethical and legal questions. Since blockchain is particularly energy-intensive, in essence, NFTs that rely on the Ethereum blockchain are just as expensive. Although it is very difficult to calculate the carbon footprint of NFTs, the environmental impact remains a point of opposition between pro and anti-NFTs. The exchanges are also ethical in view of the record prices charged for the acquisition of certain virtual goods such as the GIF of Pepe the frog shaking his buttocks sold for 9 million dollars, is this really reasonable? Anyway, the beginnings of NFT are striking. Whether or not you agree with the principle, NFTs promise big changes in the coming years in the vast movement of web monetization. Finally, it is also a new way of investing and placing money.
