The Echo-nomist

Most of you might be familiar with the latest fad on the internet, drumroll please- NFT or Non-Fungible token. It took me a while to understand what NFTs are and how exactly do they work, but I’m going to try my best to explain it to you. 

A good place to start would be the meaning of “fungible.” Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type. Let’s say you have a ₹500 note. You can exchange this for 5 ₹100 notes (or any other combination). But what if it’s non-fungible? You can’t exchange it like this. Basically, non-fungible means possessing unique properties which prevents it from being exchanged with something else. Like the Mona Lisa painting. You can click a picture, take a printout, paint a replica but there is only ONE original painting which is at Louvre museum. 

NFTs are one-of-a-kind digital asset that isn’t mutually interchangeable. The keyword here is digital, which means they are intangible. Examples are memes, gifs, tweets etc. 

At this point I was really questioning NFTs. Can’t I just screenshot a meme, screen record a gif? What was the relevance of buying it. Seems like a waste of money. 

Blockchain. 

You might have heard of Blockchain while researching about Bitcoins or any other crypto currency. Essentially, it’s a shared ledger that contains records of digital assets and crypto currency. Blockchain is also used while dealing with NFTs. The shared ledger contains proof of ownership and gives details about current and previous ownership, price and everything. The records aren’t easy to forge as the ledger is maintained by thousands of computers around the world. 

“When someone transfers one NFT to someone else, the code, which represents the NFT, also gets transferred to the other person on the blockchain. This makes sure that one can check on the blockchain who owns the NFT. When an NFT is created it is put up on the blockchain and is time stamped, therefore it makes digital ownership very simple and easy to identify,” said Nischal Shetty, chief executive officer of WazirX.

Let’s suppose you have the NFT of a meme. People can still share the meme, screenshot it, download it, get it printed on t-shirts or mugs. But you own the “original” work. It’s like having an MRF bat and having an MRF bat signed by Kohli.  

Here are a few examples of NFT:

The CEO of twitter, Jack Dorsey, is selling his first tweet on twitter as an NFT. The highest bidder as of now is Sina Estavi, CEO of Bridge Oracle, at $2.5 million

just setting up my twttr

— jack (@jack) March 21, 2006

NBA is a hot investment right now! NBA Top Shot, if we’re being specific. Remember the PokemonGo, WWE, Cricket Attax cards we used to trade when we were younger? An online version of it. This is not a joke. They have around 150,000 transactions totaling to $42 million in sales in a day. I could write a whole other article about how it works, so we’ll not go into details. But basically, NFTs are being used to make digital cards of basketball players nd highlight clips of iconic basketball players.

Artists are using NFTs wisely. Grimes sold her digital artwork as NFTs by putting them up for auction. She sold her collection for $6 million in less than 20 minutes. She wasn’t the only artist who sold her digital work as NFTs. An NFT of Beeple’s (a digital artist) work was sold at Christie’s for $69 million. The rock band, Kings of Leon, sold their latest album as an NFT.

People have mixed opinions on whether or not NFTs are going to stay. What do you think?