All about ‘NFT’

DONGGYU LEE

The word ‘NFT’ that you hear a lot these days, what exactly is this NFT? NFT stands for ‘Non-Fungible Token’. The fungible tokens each have the same value and function. They can be exchanged with each other, and if a 1:1 exchange of the same unit occurs, it is the same as if no exchange actually occurred. These include fiat currencies, common cryptocurrencies, and bonds. On the other hand, non-fungible tokens have their own uniqueness. Since the issuer, flight, and seat location are all specified, it is similar to a ticket in which the same product cannot exist at all. NFT guarantees uniqueness by permanently leaving encrypted transaction history on the blockchain. It is different from the traditional method of guaranteeing uniqueness by obtaining arbitrary certification from a specific individual or institution. It has been noted that it is a technology that can be used to issue “proprietary ownership” even for “digital files” that can be copied by anyone. Currently, the most widely used blockchain platform for NFT issuance is Ethereum. There is also the meaning that uniqueness is guaranteed decentralized by issuing NFTs through an open blockchain such as Ethereum.

(Image Source: sedaily)

A huge amount of capital is starting to flow into the NFT market. As the breadth of assets that can be traded for ownership is rapidly expanding, conventional common sense is being destroyed. Mike Winkelmann’s ‘Everydays: the First 5000 Days’, dubbed ‘Beeple’, sold for $69.3 million at Christie’s in New York. Twitter CEO Jack Dorsey’s first tweet broke $2.5 million at auction. Unimaginable things are happening in the existing market. There is also criticism that “blind money” is pouring in as a new investment field opens. Even the writer Beeple, who has great expectations for the potential of NFT, said that he thinks that the current NFT market situation is a ‘bubble’.

This is not the only problem with NFTs. Since the copyright of the target file is not required for NFT issuance, there may be a problem that one’s works or possessions are published and traded as NFTs without the knowledge of the original author. In addition, there are various issues that need to be discussed in depth in courts around the world, such as the relationship between NFTs and intellectual property rights, the conflict between the permanence of NFT ownership and the prescription of the original copyright, and the legal effectiveness of copyrights traded with NFTs. The safety aspect is also a concern for many. Since blockchain is not a completely hack-free technology, it cannot be said that there is no risk of NFT forgery and tampering. In particular, NFTs based on small open blockchains are more vulnerable to hacking.

At least for a while, it looks like there will be a huge influx of capital into the NFT market. While there is still insufficient information to discuss the long-term outlook, there are many positives. It is a practical technology with many potential applications apart from the fact that it has opened a new investment field. Let’s pay attention to the flow of NFT in the future. Whether NFT is a ‘Bubble’ or ‘Something’ that will revolutionize our future.

(Image Source: sisaweek)

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