More proof that cryptos will change how we do everything.
Non-fungible tokens (NFTs) are the latest craze to come out of the cryptoverse. Many are pieces of art, but they could be any digital thing. The key is that their ownership is verified by the block chain.
So while it’s possible for a fancy million-dollar j-peg to be copied and copied and copied again, the proof of ownership is immutable.
Initially it started out as a bit of a laugh. An experiment in a crypto use-case.
But FOMO took hold and people either rich or dumb (or both) started to spend big on digital assets. But you know what’s even dumber? They went on sold them for even more!
Someone even paid $69m for a digital piece of art that was auctioned at Christie’s in London!
The big end of town always knows how to smell out a buck or two, so should we be really surprised when one of the big players ends up piling in?
On August 18, digital payments giant Visa spent $150,000 to buy a unique work of art, and in so doing quietly took its first step into the metaverse, a nascent online world that promises to transform the internet into a virtual reality.
Instead of canvas or marble, the pixelated artwork, named CryptoPunk 7610, is what’s known as a non-fungible token (NFT), a unique digital asset which, similarly to bitcoin, certifies the authenticity, ownership and provenance of any digital object written to a blockchain. One of the 10,000 24×24 pixel images of the CryptoPunk collection, generated algorithmically, Visa’s first NFT is an avatar of a female character, distinguishable by a mohawk, large green eyes and bright red lipstick.
However, the company didn’t actually custody the 49.5 ETH, paid for the token, or the asset itself. Instead, newly licensed bank, Anchorage, has helped facilitate the deal, and importantly became the first known U.S. bank to custody one of these novel assets.
To be clear NFTs aren’t a form of crypto currency they do play in the same space… let’s call them very close cousins.
They are unique tokens assigned to a digital asset – it makes ownership verifiable and this has created real-world demand for something people never really considered before…
What is interesting (and a bit weird) is that it’s become so lucrative that movie studios and other big artists are also looking to cash in on the NFT craze.
So much so Quinten Tarantino is being sued by his studio for attempting to sell an NFT of unpublished scenes from his movie Pulp Fiction!
NFTs are another example of the disruptive nature of crypto – jokes and lawsuits between rich people aside – the real utility in NFTs will come in the form of digital contracts and the verification of ID and certifications.
Put it this way – if you need immutable proof of ownership, it could well be NFT tech that delivers the solution.
It’s here that the opportunity for investment is ripe.
As always, being informed and being early is king.
So while you’re probably not going to want to part with your hard earned cash on an NFT of a cat – it doesn’t hurt to keep an eye out for the opportunities that are already here.
The trick is to know where to look.