What is 'NFT Art' and what does 'NFT' mean? All your questions about new craze answered

Published date01 May 2021
Publication titleExpress, The/The Express on Sunday: Web Edition Articles (London, England)
What is an NFT?Well, NFT stands for Non-Fungible Token. But, let's be honest, knowing that is probably not all that enlightening.

In a nutshell, NFTs work in the same way as a certificate of authenticity. If you buy a renown work of art, an antique, or a celebrity signature at auction, you will receive a certificate of authenticity to prove that what you have on your wall is the real deal. One of a kind.

With digital artwork, it's not that easy. Digital files can be reproduced in seconds — either by the artist saving another copy from their hard-drive, or by anyone else who has access to the file simply duplicating it. In the world of digital art, how can you prove that you own the original.

Well, that's where NFTs come in.

In economics, if something is a "fungible asset", then it can be readily interchangeable. Like money. Swapping a £20 note for a £10 and two £5 changes what you have in your hand — but the value remains identical.

If something is non-fungible, then it's impossible to change it with anything else and retain the value. The value comes from the fact that it cannot be swapped or altered.

So, if you have bought an NFT of your favourite digital artwork, then you own that one-of-a-kind file. It cannot be swapped or exchanged. It's value comes from the fact that you own the original — exactly like if you had an original painting from John Constable in your collection.

How Do NFTs work?NFTs leverage a similar technique to cryptocurrencies, like Bitcoin. A record of who owns what is recorded in a ledger, which is shared across the globe. Thousands of computers maintain the ledger, so it's impossible to simply tweak the records to claim ownership of something that you don't — as there are thousands of witnesses to the contrary.

These machines maintain and update the ledger as it's one of the only ways to "mine" cryptocurrencies. By authenticating transactions with these digital coins, and registering ownership of digital artwork via NFTs, these machines are able to slowly work towards earning a small piece of Bitcoin for free.

But while this was a pretty simple task anyone with a half-capable desktop PC could do in the first few years of cryptocurrency and Bitcoin, these coins are so in demand — not to mention that fact that there are a finite number of these coins — means that it now takes some serious computing power to get any results from this ledger maintenance.

Yes, of course. If you see an image online, you can screenshot it, set it as your...

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