The cipher.tech Guide to NFTs
What is an NFT?
NFT (Non Fungible Token) is a digital object – it is effectively a crypto coin, sometimes referred to as a “smart contract”.
It records the authenticity and property right to some other digital property, such as a piece of digital art. A common mistake people make is to talk as if a work of art IS an NFT but it’s more like a stock certificate, referencing a particular item of value, rather than the NFT being the valuable asset itself.
Why the buzz around NFTs now?
“It’s like the California land grab, suddenly people have realised there is value so they need to record that value and make it tradeable. Unlike the land in California, that is finite, the playing field of metaverse and crypto is infinite. But, while that space might be infinite, the human attention span is the opposite so a lot of these tokens will be worthless in time. Right now people are saying “this is cool let’s go there” but like any bubble, at some point it will pop or fizzle and only the items with longevity will retain their value.” Gerald Banks, Founder, cipher.tech
Half a century ago Leonardo da Vinci had no idea his painting of a woman would go on to be one of the most valuable pieces of art in the world, just as 60 years ago people collecting baseball cards could not have envisioned that some would end up being worth millions. It almost impossible to predict what will be valuable in time so the land grab continues.
What’s this got to do with Metaverse?
As in the real world, if you want to own something in the metaverse you’ll need some form of ownership certificate, in the digital landscape this means NFT. They could be a digital avatar of yourself, what you wear or even land tokens in a metaverse that releases a limited number.
Everyone from computer games to designer brands are getting involved with the metaverse and thus NFTs.
How do I invest in NFTs?
There are many platforms that trade royalty stream agreements, some can be bought with national currency (eg USD) and others with cryptocurrency (which can also be bought with national currency through a crypto trading platform). Some examples of NFT trading platforms are opensea, uniswap, cryptovoxels. They can be expensive and as we said earlier, there’s no guarantee that an NFT will retain its value so only get involved if you can afford to lose your investment.