NFTs Are No Longer Just GIFs and JPEGs

NFTs Are No Longer Just GIFs and JPEGs

Most of us have heard about Beeple’s Everydays: The first 5000 days selling for a whopping $69.3 Million dollars but most of us don’t realize the significance of that astronomical number. To put it into perspective, compared to traditional art, only 100 paintings have sold at a higher price than Everydays. That is all paintings sold ever! The investors in the art world have been around for centuries and NFT investors are just getting started.

There is no doubt that NFTs are changing the way we think about art, but this paradigm shift is not restricted to GIFs and JPEGs as the popular news might suggest. NFTs mark a turning point for digital transformation, as applications and integrations are spilling to various sectors: from music and gaming to energy and supply chains.

Understanding the true applications of NFTs

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In essence, NFTs are a unit of data on a blockchain, where each NFT represents a unique digital item such as art, audio, videos, items in video games, and other forms of creative work.

Transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts, and ensure that money changes hands. None of this will be necessary for the future. Transactions recorded on blockchains are reliable because the information cannot be changed. Smart contracts can be used in place of lawyers and escrow accounts to automatically ensure that money and assets change hands and both parties honor their agreements. NFTs convert assets into tokens so that they can move around within this ecosystem.

Any NFT is simply a piece of digital memorabilia, nothing more, nothing less. It can work like any other speculative asset, where investors make a purchase in hopes of the value increasing, so they can make a profit.

NFTs outside the art world

Technically, anything digital can be an NFT. They give musicians the potential to provide enhanced media and special perks to their fans. Kings of Leon and Grimes are some of the leading examples in the music industry. With sports memorabilia, between 50% and 80% of items are thought to be fake. Putting these items into NFTs with a clear transaction history back to the creator could overcome the massive counterfeiting problem that exists in the industry.

The potential of NFTs goes much further. For instance, San Marino, the tiny nation surrounded by Italy,

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