Saturday, December 2, 2023

NFTs – The Rich People’s Playground

Written By Mira Divan (Grade 5)

From ancient times, cavemen have been carving pieces of stone to create something beautiful out of what would have usually gone unnoticed. Something they could admire, and look up to as art. Once humans evolved enough to figure out how to use clay, they began to make sculptures out of them. For centuries, humans were using paper and pigment to create paintings. Now, humans are using computers to create something never seen before – Non-Fungible Tokens.

An NFT (Non-Fungible Token) is a digital asset. It is a file that is equivalent to things in real life like art, music, videos and items, but exist only online. A Non-Fungible Token is a unique item or collectible of value. They are always stored as digital files. For example, Starry Night by Vincent Van Gogh is a real, physical piece of art, and its original exists only in the physical world. On the other hand, Everydays – The First 5000 Days by Beeple, is an NFT and only exists in the digital world.

What works when it comes to NFTs is that anyone can create or buy them- this doesn’t mean that if you create an NFT it will definitely be bought, but you can still try. Most exchange of these tokens happens on OpenSea. OpenSea is a website where you can buy and sell NFTs freely. The ambition of the company is to become the Amazon of NFTs. If you open the website you will see each collection of NFTs, whether it’s videos, in-game collectibles or art. NFTs are only bought through cryptocurrency, in most cases, Ethereum (ETH). 

Of course, there has been a lot of controversy over NFTs and their real value. Opinions on NFTs are divided- some people think they could replace real items in terms of value, while other think it has no real meaning or value. Yet, one undisputed fact is that NFTs are currently a rage. NFTs aren’t of any physical value, but they create FOMO amongst people, much like any craze. It has become a way of showing off wealth or having your own presence in the online world. NFTs may seem like they aren’t worth investing in, but no assumptions should be made yet. With celebrities splurging on vast collections of various NFTs, many people are being encouraged to buy their own NFTs.

Despite how valuable NFTs are becoming, most people are asking the question: are they really that scalable and will they grow any bigger than what they are? Nobody knows yet, but it is suspected that NFTs could be the next wave to replace physical tokens, and become a statement known worldwide, maybe holding more value than actual objects as well.

The only question lingering in my head, is that people are only buying NFTs for bragging rights and not for resale or not to generate wealth, so does that mean NFTs aren’t scaleable, like physical art? After all, both of them are only bought to make a statement.

I don’t know how this is going to turn out, but I do know for certain that change is good no matter what it brings. Yet, given a chance, I would not invest in NFTs because I am not the type of person who believes that bragging rights are worth so much money, and besides, I don’t have a social media account yet. But, if you are on social media, can afford it and enjoy showing off, then NFTs are definitely worth exploring.

Featured Image Courtesy – WIRED


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