An NFT can be resold in the market for cash or cryptocurrency and is taxable income. (Credit: Divyanshi Soni)
A new year, a new set of aspirations. And a new adventure in the technological world is to experiment with non-fungible tokens.
What? NFT, being such a small business enterprise, the name has a high tech sound. Basically it has to do with blockchain technology, cryptocurrencies, etc. So what are non-fungible tokens?
TVN – They are digital currencies based on the macroeconomic concept of convertibility. Money, we know, whether physical or digital, is a convertible asset, just like oil and gold.
The Oxford Dictionary defines fungibility as the replacement of another identical item or “mutually interchangeable” assets. Tokens digitally represent anything, including online-only assets like digital artwork or tangible assets like real estate. Other examples include in-game items such as avatars, digital and non-digital collectibles, domain names, and event tickets for concerts and special events. Add movies, music, or properties to virtual worlds used in avatar portals such as Second Life.
Since NFTs represent a specific asset, they are not as convertible as other more conventional monetary or data bit currencies. Thus, the concept of non-fungible.
BUSINESS – It turns out that artists, influencers and the National Basketball Association of the United States make millions with non-fungible tokens. Enthusiasts see NFTs as the future of property. From event tickets to homes, all kinds of properties can have NFT property status. For artists, NFTs could solve the problem of monetizing digital works of art. The NBA launched Top Shot in 2019, a marketplace for NBA highlight reels, which users can collect and trade using blockchain technology.
An NFT can be resold in the market for cash or cryptocurrency and is taxable income.
Data from DappRadar, a company that tracks sales, showed that NFT’s trade reached $ 22 billion in 2021, up from just $ 100 million in 2020.
ART – It turns out that cryptocurrency is easily adopted in the art world to generate profit. It’s an intersection of binary data and art to empower creatives with innovative web offerings. As one creator describes it, NFTs allow artists to interact directly with fans and make a living from their craft without a centralized intermediary.
For example, sites like Known Origin sell international designer graphic arts based on the Ethereum Blockchain concept. Anyone can collect, buy, and sell digital art using NFTs as a currency for commodities.
Even business creators market their fashion designs through the NFT currency concept.
PORTFOLIOS – All NFT art objects are sold through e-wallets which send, receive and store digital assets. Wallets come in many forms, installed in a browser, an extension, a piece of hardware connected to a computer, or an app on your phone. This Eth Hub e-commerce site explains the concept of Ethereum wallets which use a digital currency called Ether. The person opens and funds a crypto wallet on an NFT marketplace for ecommerce or investing.
ETHERUM – It is a public and open source electronic transaction ledger that allows developers to build blockchain applications with business logic within an NFT network. As such, NFTs open the door to a global financial system where an internet connection is all you need to access applications, products, and services that run in cryptocurrency. Anyone can interact with the Ethereum network and participate in this digital economy without third parties.
RELIABILITY – To sum up this somewhat “ethereal” subject, NFTs are digital tokens that Internet users can use to represent the ownership of unique objects. They let investors “symbolize” things like art, collectibles, and even real estate. Objects can only have one official owner at a time, and the Ethereum blockchain keeps them secure. The function of the blockchain is to prevent anyone from altering the ownership record with a copy / paste tactic or a non-fungible pseudo token. So everything is pretty secure.