Arshad Khan is co-founder and CEO of Arabian Bourse Ltd
This is Nyan Cat, he’s part cat, part pop-tart. The GIF (or if you’re one of those, JIF) of a rainbow casting feline was a viral meme back in 2011. In February 2021, the original GIF was sold at an online auction for 300 ETH, which is the cryptocurrency that powers the Ethereum network.
Nyan Cat is a part cat, part pop-tart
That price tag was equivalent to almost $600,000 when the GIF was sold. The question that might pop into your mind is “Well, how can someone own the original copy of a GIF that was circulated all over the internet?”
That’s where the term NFT comes into play. NFT stands for “Non-Fungible Token”, this GIF was sold as an NFT, which acts as a digital certificate of authenticity.
Back in 2018, the overall market for NFTs was around $41 million, however, when the pandemic started in 2020, the overall market for NFTs ballooned to over $338 million, according to the data collected from nonfungible.com.
But as with every boom, there are sceptics that enter the market, and they’re asking whether these NFTs are actually worth the value assigned to them, especially if all it takes to view them is an internet connection.
To have a better understanding of just how these new tokens work, one must understand the word ‘fungibility’. In layman’s terms, it’s the ability to exchange or substitute an asset with a similar asset of the same value. The most common example of fungible assets is currency.
Assume that you have five $1 bills in your wallet, but, you don’t want to be carrying so much change. You’re able to exchange those five $1 bills into a single $5 bill, thus the value is still the same but in a different format. Non-fungible assets are quite the opposite, each one is unique and cannot be exchanged or substituted.
Just like the famous Mona Lisa painting, it can’t be exchanged for a poster of the Mona Lisa from a gift shop, because the value is completely different.
The idea behind an NFT is that you’d have this digital signature, just like a great piece of art that might have the signature of the artist. It’s as if you’re going to the original work and verifying that this is real and authentic.
The NFT gets this unique signature, set through the blockchain is where all the information is recorded.
Basically, NFTs are essentially a form of Cryptocurrency. However, unlike fungible cryptocurrencies such as Bitcoin or Litecoin, NFTs are unique. The information contained within the code of the NFT is essential information, such as who owns the NFT, when it was sold, and who the previous owner of the asset is, in addition, the layer of encryption ensures the NFTs authenticity as well as scarcity.
This repairs a big obstacle that digital creators are facing on the internet, concerning the tactics into making their creations scarce and therefore more valuable. This means that at the end of the day there are only one of these tokens available for sale.
One of the earliest applications of this scarcity was the digital collectable game, CryptoKitties. This game emerged in 2017, and permitted users to buy, trade, and breed digital cat collectables. Each new cat created was an NFT, which certified its originality and ownership.
Since then, NFTs have been applied to a wide variety of assets from video games to sports memorabilia. One example is NBA Top Shot, which allowed users to gather a collection of digital basketball highlights, which are NFTs and have generated a lot of business.
According to CryptoSlam, by mid-March, the NBA Top Shot clocked in more than $338 million in sales, since its start in October of last year.
These NFTs are also making their way into the mainstream art world. For instance, the Auction House Christie’s opened bidding to its first purely digital art NFT.
NFTs have been applied to a wide variety of assets from video games to sports memorabilia
The bids soared into the millions of dollars.
The reason why people are becoming much more interested in NFTs is that they’re able to do a lot more complex things, unlike Bitcoin. You’d be able to set terms and conditions within the NFT itself, such as the original creator would receive a piece of the money upon each resale of the NFT.
At the end of the day, these are all-new uncharted and untested applications of NFT. The surface seems to have been only scratched in terms of what can be done with NFTs.
However, there are a lot of sceptics that are saying that this new token is only something being hyped up, they’re also raising concerns about the ability to scam these kinds of tokens. It’d be very difficult for someone to go ahead and verify whether the person selling this NFT is the creator of said NFT.
Others are saying that it’s very sceptical that ownership alone makes things valuable. But, when it comes to digital art, a buyer owns the original digital painting, but the person can’t keep others from copying and sharing the image in a different way.
There are a lot of cryptocurrency enthusiasts that are very bullish on the prospects of NFTs. On the other hand, critics are wary enough that it may be a digital bubble in the process, either way, it seems that Dogecoin isn’t the only meme that’s making people some money.
Follow us on
For all the latest business news from the UAE and Gulf countries, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.
by Staff Writer
More of this topic
Why would you pay $600,000 for a rainbow cat meme? Welcome to the world of NFTs
Non-Fungible Tokens, NFTs, are booming since the pandemic, Arshad Khan of the Arabian Bourse takes a look at the digital phenomenon
Arshad Khan is co-founder and CEO of Arabian Bourse Ltd
This is Nyan Cat, he’s part cat, part pop-tart. The GIF (or if you’re one of those, JIF) of a rainbow casting feline was a viral meme back in 2011. In February 2021, the original GIF was sold at an online auction for 300 ETH, which is the cryptocurrency that powers the Ethereum network.
That price tag was equivalent to almost $600,000 when the GIF was sold. The question that might pop into your mind is “Well, how can someone own the original copy of a GIF that was circulated all over the internet?”
That’s where the term NFT comes into play. NFT stands for “Non-Fungible Token”, this GIF was sold as an NFT, which acts as a digital certificate of authenticity.
Back in 2018, the overall market for NFTs was around $41 million, however, when the pandemic started in 2020, the overall market for NFTs ballooned to over $338 million, according to the data collected from nonfungible.com.
But as with every boom, there are sceptics that enter the market, and they’re asking whether these NFTs are actually worth the value assigned to them, especially if all it takes to view them is an internet connection.
To have a better understanding of just how these new tokens work, one must understand the word ‘fungibility’. In layman’s terms, it’s the ability to exchange or substitute an asset with a similar asset of the same value. The most common example of fungible assets is currency.
Assume that you have five $1 bills in your wallet, but, you don’t want to be carrying so much change. You’re able to exchange those five $1 bills into a single $5 bill, thus the value is still the same but in a different format. Non-fungible assets are quite the opposite, each one is unique and cannot be exchanged or substituted.
Just like the famous Mona Lisa painting, it can’t be exchanged for a poster of the Mona Lisa from a gift shop, because the value is completely different.
The idea behind an NFT is that you’d have this digital signature, just like a great piece of art that might have the signature of the artist. It’s as if you’re going to the original work and verifying that this is real and authentic.
The NFT gets this unique signature, set through the blockchain is where all the information is recorded.
Basically, NFTs are essentially a form of Cryptocurrency. However, unlike fungible cryptocurrencies such as Bitcoin or Litecoin, NFTs are unique. The information contained within the code of the NFT is essential information, such as who owns the NFT, when it was sold, and who the previous owner of the asset is, in addition, the layer of encryption ensures the NFTs authenticity as well as scarcity.
This repairs a big obstacle that digital creators are facing on the internet, concerning the tactics into making their creations scarce and therefore more valuable. This means that at the end of the day there are only one of these tokens available for sale.
One of the earliest applications of this scarcity was the digital collectable game, CryptoKitties. This game emerged in 2017, and permitted users to buy, trade, and breed digital cat collectables. Each new cat created was an NFT, which certified its originality and ownership.
Since then, NFTs have been applied to a wide variety of assets from video games to sports memorabilia. One example is NBA Top Shot, which allowed users to gather a collection of digital basketball highlights, which are NFTs and have generated a lot of business.
According to CryptoSlam, by mid-March, the NBA Top Shot clocked in more than $338 million in sales, since its start in October of last year.
These NFTs are also making their way into the mainstream art world. For instance, the Auction House Christie’s opened bidding to its first purely digital art NFT.
The bids soared into the millions of dollars.
The reason why people are becoming much more interested in NFTs is that they’re able to do a lot more complex things, unlike Bitcoin. You’d be able to set terms and conditions within the NFT itself, such as the original creator would receive a piece of the money upon each resale of the NFT.
At the end of the day, these are all-new uncharted and untested applications of NFT. The surface seems to have been only scratched in terms of what can be done with NFTs.
However, there are a lot of sceptics that are saying that this new token is only something being hyped up, they’re also raising concerns about the ability to scam these kinds of tokens. It’d be very difficult for someone to go ahead and verify whether the person selling this NFT is the creator of said NFT.
Others are saying that it’s very sceptical that ownership alone makes things valuable. But, when it comes to digital art, a buyer owns the original digital painting, but the person can’t keep others from copying and sharing the image in a different way.
There are a lot of cryptocurrency enthusiasts that are very bullish on the prospects of NFTs. On the other hand, critics are wary enough that it may be a digital bubble in the process, either way, it seems that Dogecoin isn’t the only meme that’s making people some money.
Follow us on
Latest News