The Takeoff
Imagine a world where the intangible becomes palpable, where each digital brushstroke takes on the weight and importance of a Picasso or Van Gogh canvas. In this newly explored dimension, JPEG files have more in common with a Sotheby’s auction than with your smartphone gallery. In this nascent realm, the lines between the physical and the digital, the unique and the replicable are blurred. Science fiction? More like a realistic projection of our here and now. I welcome you to the cosmos of NFTs, Non Fungible Tokens, the final frontier in the landscape of creativity and ownership.
NFTs are the catalyst for an unprecedented metamorphosis in our understanding of art, value and, yes, even reality itself. As Picasso challenged the norms and limitations of his time to free art from its perceptual shackles, NFTs are today the crucible where our most ingrained notions of authenticity and belonging are recast.
Are you ready to embark on this cosmic journey towards redefining creativity and ownership in the 21st century? If your answer is yes, buckle up and join me on this fascinating journey through the changing landscapes of art, technology and, above all, the human being in the digital age. And like any good journey, this one begins with an understanding of our faithful travelling companion: the NFT.
Deep Navigation
Before we dive headlong into the fascinating ocean of NFTs, let’s prepare our mental vessel for a deeper voyage. We will embark on an expedition into the more enigmatic waters of this digital revolution. In this section, “Navigation in Depth,” we will seek to uncover the contours and undercurrents that define the NFT landscape. From understanding the basic architecture of what NFTs really are, to demystifying the more technical concepts of tokenisation, to grappling with the complex but inescapable questions of legalities and ethics, this segment seeks to be the compass that guides our understanding of this new world. Now, with sails hoisted and eyes fixed on the horizon, let’s dive into the first topic: What exactly are NFTs?
What are NFTs?
Let us pause in our cosmic odyssey to put our feet – or rather, our cursor fingers – on solid ground. What are these mysterious NFTs that seem to have captured the collective imagination like a digital Picasso? Non-Fungible Tokens. The words sound almost like a magic incantation, a master key to a treasure hidden in a digital palace. But stripped of the mysticism and echo of novelty, NFTs are objects of art in the blockchain era.
The word “fungible” is a financial term used to describe something that can be exchanged for something identical. A dollar is a dollar, exchangeable for any other dollar. But NFTs are “non-fungible”, meaning that each one is unique, indivisible and therefore irreplaceable. Therein lies their magic: in a world where copying and reproduction are as easy as a right-click of the mouse, NFTs offer us the possibility of making the digital unique.
Based on blockchain technology, NFTs allow the creation of an immutable and decentralised digital “certificate of authenticity”. Imagine a Picasso painting, where you can not only appreciate every stroke and nuance of the artist, but also have a detailed record of its entire history, from the moment the last brushstroke touched the canvas to every hand that has owned it. Now, transfer that concept to the digital realm. NFTs do just that, adding a layer of authenticity and ownership that was unimaginable in the pre-blockchain era.
Now, these tokens are not just a luxury ID for pieces of digital art. They are a revaluation of the digital itself, a way to give weight and substance to what was once considered ethereal. In this sense, they are like Picasso’s secret codes: revolutionary, disruptive and completely unexpected.
Yes, we have arrived at a port where non-fungible tokens are the vessels that will take us into waters never before navigated. But before we set sail for that infinite horizon, it is vital to understand the many ways in which these curious tokens are reshaping not only art but the entire fabric of our digital interaction.
Demystifying the Token
We now navigate towards the demystification of the word “token”, which perhaps evokes for some a magical object in a fantasy novel or a game token in a retro arcade. However, in the blockchain technology ecosystem, a token is a digital representation of ownership and/or access, encoded in a blockchain. But why is it so important to demystify this term?
Let’s start with its etymology. The word “token” comes from the Old English tācen, meaning “symbol” or “sign”. In a very fundamental sense, each token is a representation, an encoded expression of something larger, more complex, and deeper. And this is where NFTs break with tradition. Instead of being tokens of physical currencies or assets, they represent something much more abstract yet tangible: digital singularity.
The importance of “demystifying” the token lies in understanding that, despite its abstract nature, it has very real applications and tangible consequences in our world. Like Picasso’s collage techniques, which broke with traditional modes of artistic composition to create something entirely new, tokens are reshaping our notions of ownership, authenticity and value in the digital environment.
In other words, tokens have gone from being mere representations to becoming entities with identities of their own. Just as Picasso transformed everyday objects and simple forms into complex and emotive messages, the token, in its non-fungible singularity, carries the history, lineage and authenticity of the artwork or digital asset it represents.
If NFTs are the vessels that allow us to explore uncharted waters, then truly understanding what a token is is like learning the language of the uncharted land we are reaching. Each token is a kind of digital Rosetta, an object that allows us to unlock greater meanings and richer experiences in this new technological landscape.
We are ready, then, to continue navigating this ocean of possibilities, but not before putting our finger on the map to mark this crucial point: the demystification of the token as a cornerstone in the construction of the NFT universe.
Statistics on NFT adoption:
The NFTs market mobilised $41 billion in sales in 2021, a 21,000% increase over 2020. (Forbes)
By 2022, the market is projected to reach $80 billion (Cointelegraph)
93% of NFTs are sold on the Ethereum blockchain. (NonFungible)
The digital art and collectibles segment accounted for 44% of sales in 2021. (NonFungible)
Legalities and Ethics: Navigating in Troubled Waters
If NFTs are the caravels that take us to new horizons, laws and ethics are the maritime code that guides our voyage. In this section, let us make an effort to navigate the sometimes turbulent waters of legal and ethical issues surrounding the universe of CLS.
Copyright: The Lost Compass
Just as Picasso faced questions of authenticity and ownership in reinventing art, the NFT world faces similar challenges but in the digital realm. Who really owns the art or object when it is tokenised? Can the original creator claim rights if their work is transformed and then tokenised? These are unexplored questions that challenge our traditional notions of intellectual property.
Authenticity: The Lighthouse in the Mist
NFTs offer a solution to digital forgery by providing a certificate of authenticity on the blockchain. ut what if what is certified is, in fact, counterfeit? Or worse, what if it is a stolen work of art? Here, ethics and legality seem to be flickering lights in the dense fog of innovation.
Sustainability: The Ecological Anchor
Just as historical maritime expeditions had their impact on native ecosystems, blockchain mining and NFTs have their own ecological implications. The carbon footprint associated with the creation and transaction of NFTs is under scrutiny, raising ethical questions about the sustainability of this new digital art form.
Access and Exclusivity: Sealed Navigation Letters
Tokenisation can lead to digital hoarding and exclusivity, closing off access to certain artworks or information. How do we ensure that this new form of ownership does not exacerbate existing inequalities or create new forms of digital elitism?
Privacy: The Hidden Periscope
Finally, although the blockchain is transparent, the identity of the owner of an NFT can remain anonymous, raising ethical questions about transparency and accountability.
Like Picasso, who challenged structures and systems, NFTs force us to review and often rewrite the rules. But they also hold us accountable to do so ethically and fairly. In this sense, legal and ethical issues are not just obstacles in our journey, but beacons that help us navigate with awareness and purpose through this new digital ocean.
Application Trail
Having unravelled the technical and ethical conundrums of NFTs in our “Navigation in Depth,” it is now time to explore their practical and palpable applications in our world. In this section, “Application Routes,” we set sail for concrete territories where NFTs have already begun to transform the landscape. From the revolution they have brought about in the art world to the ways in which they are reshaping the domains of music and digital content, these routes will take us on a journey into the heart of disruption. So let’s set course for our first port of call: The Digital Art Boom.
The Digital Art Boom
The art world has always been a space of continuous evolution and revolution, and the rise of NFTs has amplified this spirit of change and challenge to pre-existing boundaries. It is no longer just about brushes, oils and canvases; human creativity has expanded into the digital dimension, and NFTs have arrived to validate and valorise this new genre.
Beeple’s sale of “Everydays” for $69 million was not just a milestone in financial terms; it was also a rallying cry that declared the arrival of digital artists on the main stage. But beyond the headlines and stratospheric figures, what really matters is how NFTs are democratising art. Now, any artist with an internet connection and a vision can eternalise their work on the blockchain and gain recognition (and remuneration) in the process.
From artworks that address social issues to pieces that play with viewer interactivity, digital art backed by NFTs is challenging our traditional conceptions of art, while adding a new layer of complexity and possibility. And in this sea of opportunity, we now sail towards our next port on this voyage of discovery.
Beyond Art: The NFT Multiverse
If you think NFTs are limited to digital paintings and 3D sculptures, get ready for a journey to new horizons. In this port of “Application Pathways,” we will navigate through the ocean of possibilities that unfold beyond art, exploring how NFTs are pushing boundaries to revolutionise other domains.
First of all, let’s consider the fascinating world of music. Here, NFTs are empowering musicians to sell their music directly to fans, without the need for middlemen such as record labels or streaming platforms. Imagine owning the only NFT of an unreleased track by your favourite artist? Not only do you become the exclusive owner of that work, but you also directly support the creator.
But what if we go further into the world of digital collectibles? From baseball cards to rare items in video games, NFTs are redefining what it means to collect. With the certainty of authenticity and the possibility of cross-platform interaction, these digital collectibles are creating new ways to connect with our passions.
And that’s not all. NFTs are also transforming media and journalism, the world of entertainment, and even certification systems and intellectual property. From launching unique pieces of journalism to selling iconic moments in sports history, we are witnessing how NFTs are reshaping the rules of the game in multiple sectors.
Now, ready to set sail to other seas of innovation, let’s anchor in our next port.
Emerging Markets: New Shores on the NFT Horizon
As we pass the compass over the vast map of NFTs, we cannot help but look to the emerging markets that are transforming what we once considered uncharted lands into veritable epicentres of innovation. In this sub-section of “Application Pathways,” we will delve into how NFTs are fuelling new economies and democratising access to wealth and value creation.
One of the most exciting spaces is that of “decentralised finance” or DeFi. NFTs here act not only as art objects or collectibles but as financial assets that can be lent, leased or even used as collateral for loans.
Beyond finance, NFTs are also giving rise to new forms of social interaction and community building in the digital realm. Think of “virtual spaces” where every object, every building, every piece of land is an NFT, allowing a level of personalisation and interaction that traditional social platforms simply cannot offer.
And what about the global impact? NFTs offer an opportunity for creators in emerging markets to enter a global stage, breaking down geographical and socio-economic barriers. Artists, musicians and creatives of all kinds in hitherto marginalised regions have the chance to offer their work to the world, accessing a market that previously might have been unreachable.
Get your sails ready, because we are leaving this port and sailing into the next: a world where the boundaries of what is possible are expanding every day thanks to the magic of NFTs.
Emerging Uses: “New Horizons in NFT Mapping”
Just as navigators are entering uncharted waters, NFTs are charting unprecedented routes in the digital economy. Their applicability is expanding beyond works of art and collectibles, landing in unsuspected sectors. Here, we detail some of the most fascinating ones.
Event and Festival Tickets
In an attempt to combat fraud and counterfeiting, event organisers are adopting NFTs as access passes. These digital tokens not only guarantee the authenticity of the ticket but can also include exclusive benefits such as downloadable content, creating a more enriching experience for the attendee.
Product Launches and Metaverse Marketing
Metaversos have become virtual arenas for inventive marketing strategies. There, NFTs act as a currency that goes beyond the simple transaction: they represent exclusive access to products, events and experiences, becoming a new engagement model for young, digital audiences.
Tokenised Educational Certificates
In academia, NFTs offer a secure and efficient way to verify and track credentials. Educational institutions can issue tokenised certificates that are stored on the blockchain, making the validation of degrees and diplomas more transparent and accessible.
Tokenised journalism
The press is not lagging behind in this revolution. Newspaper articles and reports are being launched as collectible NFTs, adding a new dimension to the concept of information as a valuable commodity. This approach raises new questions about intellectual property in journalism and how the media could adopt this technology to monetise their content in innovative ways.
Destination Harbor
Now that we have sailed the seas of disruption and explored the new shores of NFTs, it is time to drop anchor in our “Port of Destiny” and reflect on the vast landscape that lies ahead.
Perspectives: The Double Edge of Revolution
NFTs, like any wind of change, have both a light and a dark side. On the one hand, they represent an emancipation for creators, a way for them to take control of their work and get fair compensation. But we cannot overlook the ethical and environmental implications; the energy consumption associated with blockchain and the potentially destabilising effects on already fragile markets.
An Eye on the Horizon: Navigating the Future
Just as Picasso, whom we mentioned at the start of this journey, left an indelible mark on 20th century art, NFTs could be the revolution that reshapes the creative landscape for decades to come. Will they be the ultimate democratisation of art and intellectual property, or will they become a speculative bubble destined to burst?
Raise your eyes to the horizon. Imagine a world where every object, every work of art, every spark of human creativity could be tokenised, exchanged and appreciated as never before. But also keep a critical and reflective approach. Like any port worth exploring, the world of NFTs is complex and full of unexplored challenges and opportunities.
As we leave this port behind, we carry with us more questions than answers, and that is perfectly fine. The great expeditions, after all, are the ones that push us to question, to challenge and, ultimately, to grow.
Nautical Glossary
NFT (Non-Fungible Token): Unique digital token that represents ownership or proof of authenticity of a specific digital object or content.
Blockchain: Block chain of records (transactions), which are linked and protected using cryptography.
Tokenisation: The process of converting rights to an asset into a digital token on a blockchain.
Smart Contract: Programmed contracts that are automatically executed when certain predefined conditions are met.
Metaverse: Interconnected virtual universes where users can interact with a digital environment and with each other.
Criptocurrency: A digital currency that uses cryptography to ensure secure transactions.
Minting: The process of creating a new digital token (NFT) on the blockchain.
Wallet: Digital wallet that allows users to store and manage their cryptocurrencies and NFTs.
Gas Fee: Fee paid for transactions and services on blockchain networks such as Ethereum.
Royalties: Automatic payments made to creators every time an NFT is resold.
Knowledge Map
Academic articles:
- Gatteschi, Valentina, et al. “Blockchain and Smart Contracts for Insurance: Is the Technology Mature Enough?.” Future Internet, vol. 10, no. 2, 20 Feb. 2018, p. 20. MDPI AG, doi:10.3390/fi10020020.
- Lielacher, Alex. “What Are Non-Fungible Tokens?.” Nasdaq, 15 Apr. 2021, https://www.nasdaq.com/articles/what-are-non-fungible-tokens-2021-04-07.
Market reports:
- “NFT Market Trends: The Growth of Non-Fungible Tokens in 2022.” Chainalysis, https://blog.chainalysis.com/reports/2022-crypto-crime-report-preview-nft-wash-trading-money-laundering/
- “Non-Fungible Token (NFT) Statistics 2022.” Finbold, https://finbold.com/non-fungible-token-nft-statistics/
Expert opinions:
- Crupi, John. “What I Learned Minting My First NFT.” Harvard Business Review, 29 Mar. 2022, https://hbr.org/2022/03/what-i-learned-minting-my-first-nft
- Ehrlich, Michael. “Are NFTs Harmful to the Environment? The Professional Take.” Forbes, 18 Feb. 2022, https://www.forbes.com/sites/forbesbusinesscouncil/2022/02/18/are-nfts-harmful-to-the-environment-the-professional-take/.