Blockchain: Is it a hype or a hoax?  39

NFTs are assets in the digital world that can be exchanged like any other

fungible assets, but they have no tangible properties. In other words, NFTs

can be thought of as digital certificates of ownership of virtual or physical

assets that cannot be tampered with or copied.

NFTs can be used for anything digital like digital art, digital music, digi-

tal scripts, tweets and pictures.

NFTs allow you to buy and sell the ownership of unique digital assets

with full transparency on ownership visible to anyone on the blockchain.

How do NFTs work?

On a high level, most NFTs are part of the Ethereum blockchain. NFTs can

use the inbuilt cryptocurrency called ETH and also can benefit from the use

of smart contracts.

Let us take the example of artwork. Traditional artworks/paintings such

as the ‘Mona Lisa’ are one of a kind and valuable. The ‘Mona Lisa’ paint-

ing’s digital copies can be easily duplicated.

With NFTs, any artwork can be tokenised to create a digital certificate of

ownership that can be bought and sold.

NFSs records are immutable and cannot be forged. As NFTs use Ethereum

blockchain technology, they can integrate the smart contract feature to

automate the buying and selling of the NFTs without any intermediatory or

middleman intervention.

Current examples of NFTs

Although it might seem crazy and unbelievable, the following are real

examples of NFTs that have been sold for unprecedented amounts so far:

• Beeple’s video sold for $6.6m. Although the ownership of the art is

unique, anyone can copy the image and reproduce it. However, the

original is only owned by the true owner of the art and can easily be

identified through a blockchain ledger.

• Beeple’s art was also sold for $69m on Christie’s platform for online

auctions.

(https://onlineonly.christies.com/s/beeple-first-5000-days/

beeple-b-1981-1/112924)

• Someone paid over $170k for a kitten image. There is a portfolio of

images that can be traded on the platform https://www.cryptokitties.

co. It is a gaming platform where players can trade virtual cats, play

games and create collections to earn rewards.

• An animated Gif of Nynan Cat (a 2011 meme of a flying pop tart cat)

was sold for more than $645,948. (https://foundation.app/@NyanCat/

foundation/219)

• Gucci Ghost Gif was sold for $3,600 (https://niftygateway.com/

marketplace/item/0x4140783cc1ba30653a0777126b122931e23

3ba14/1300010027)