![]() ![]() The tokens code#That code is made up of various bits of information. The most common type of NFT is a piece of code that is written into the blockchain. ![]() The other type is where the entire work is uploaded to the blockchain these are less common as it is expensive to upload information to the blockchain. There are various types of NFTs, but the most common is a metadata file containing information encoded with a digital version of the work that is being tokenized. In the intervening years, other types of works have been turned into NFTs, including memes, music albums, and digital art.Īnything that can be digitized can be turned into an NFT. The first use of the NFT standard in the Ethereum environment was a set of pixelated images of characters called Cryptopunks, and was released in June 2017. Non-fungible goods use a different token standard, known as ERC-721.Īny digital work, including physical goods, which can be represented in digital form, such as a photo, video or a scan, can be turned into a non-fungible token. Conversely, non-fungible goods are unique one-offs, like a custom-made silver necklace, or golden statuette, or a painting. Commodities tend to be fungible: silver, gold, oil, grain. Fungible goods are by definition exchangeable regardless of the specific item you’re selling or buying. While there are many different types of token standards, the most popular is found in the Ethereum infrastructure, which deploys tokens using the ERC20 standard, which sets the rules for fungible tokens. There are various types of tokens they can represent anything from commodities and loyalty points, to shares, coins, and more. ![]() NFT basicsįirst, what is an NFT? One of the most heralded uses of blockchain technology is the tokenization of assets, where a token is a programmable digital unit of value that is recorded on a digital ledger. In 2021, NFTs have taken the art and tech worlds by storm. What is going on? What are NFTs? And what does copyright have to do with it? Musician Grimes has also reportedly sold over USD 6 million worth of digital artworks. Old memes have been selling at auction as well, with the famous meme of Nyan Cat, an animated colourful cat whose body is in the shape of a pop tart, selling for 300 ETH (the cryptocurrency generated by the Ethereum protocol), over USD 1 million at the time of writing. An NFT of a collage of works by digital artist Beeple was auctioned at Christie’s and sold to another crypto entrepreneur for the eye-watering sum of almost USD 70 million. The NBA had been selling NBA Top Shots, “unique” NFTs of NBA moments, the value of which has exploded. Twitter’s CEO Jack Dorsey sold an NFT of his first tweet for the equivalent of USD 2.5 million. Some think they acquire the underlying work of art, and all its accompanying rights, but, in reality, they are simply buying the metadata associated with the work not the work itself. There is widespread confusion surrounding the rights that buyers acquire when they purchase an NFT. This breakthrough technology has taken the art and tech worlds by storm. One of the most high-profile technological stories of 2021 has been the rise in popularity of the non-fungible token (NFT), the newest hype in the world of distributed ledgers and cryptocurrencies. By Andres Guadamuz, Senior Lecturer in Intellectual Property Law, University of Sussex, United Kingdom ![]()
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