What is Non-fungible Token?

A non-fungible token also known as NFT is a unit of data stored in the blockchain, every NFT is a certified asset to be unique and therefore cannot be manipulated. NFTs in general is a form mechanism that can be used for digital items such as photos, videos, audios, tweets, status, and other digital assets.

NFTs are representing the ownership of a user owning a digital asset via the protection of blockchains. This is safe because it is transparent which all of the transactions within the same system are protected and unmanipulated.

Back in 2020, there has been increased interest in using NFTs. The rise of cryptocurrencies like Bitcoin, Flow, Ethereum, and Tezos is also pushing NFTs to the highest peak. As for this, the NFT market value tripled in 2020, achieving more than $250 million. Sports Association like NBA <https://nbatopshot.com> and MLB <https://toppsmlb.com> have also joined the industry recently. Ledger Insights (2021) NBA TopShot is booming, for less than 3 weeks, the Creator of NBA TopShot raised $305 million in funding at a $2.6 billion valuation. The Information reports that funding in the future is believed to be above $7.5 billion.

Back to the topic, how could these intangible and untouchable digital assets worth so much? Traditional artworks such as old paintings are valuable because they are one of a kind. Sounds reasonable right? However, digital files can be easily and endlessly duplicated, there is no limitation to digital files. From this aspect, NFTs “tokenised” artworks to create a digital certificate (metadata) of ownership that can be bought and sold. As for this, it solved the problem of duplicating the same art and eventually created a scare in the market.

So how much are NFTs worth? In theory, anybody can just create their work to sell it as an NFT. On 19 February, an animated Gif of Nyan Cat (2011 meme of a flying pop-tart cat) was sold for more than $500,000 <https://foundation.app/NyanCat/nyan-cat-219>. Followed by musician Grimes sold some of her digital art for more than $6 million <https://www.bbc.co.uk/news/technology-56252738>. Twitter’s tweet <https://www.bbc.co.uk/news/world-us-canada-56307153> that I mentioned early has also sold for $2.5 million.

When something is being too good, it comes to the question “Is this just a bubble?” Well, I think that the NFTs system/mechanism is still yet fully developed. NFTs do receive criticism as well, some said “There are some artists absolutely making bank in this stuff!”, “The same guys who’ve always been at it, trying to create a worthless magic bean and then sell for money.” However, as an early adopter in this market, I have invested a couple of hundred dollars in this market. Lately, I have started to collect some digital arts from NBA TopShot as I believe values are there. Appreciation that creates the values.