Non-Fungible Tokens (NFTs) have recently began to be a trend, with many Berkeley High School (BHS) students taking a strong stance against their existence. However, while many students have heard of NFTs, they don’t understand what NFTs actually are and how they work. If they did, they may realize that NFTs are not as useless as they may seem.
At their core, NFTs are a digital way to represent the ownership of an item. Like the deeds to your house, an NFT is simply paperwork that says who owns what. However, unlike the deeds to your home, NFTs are decentralized. It’s impossible for anyone to modify a NFT if they aren’t the owner, including the government or the artist. Additionally, the purchase history of NFTs are public, meaning anyone can go and see what an NFT sold for in the past.
People most commonly associate NFTs with collectibles like the Bored Ape Yacht Club or CryptoPunks, where each NFT has a certain number of traits, — some rarer than others — similar to Pokémon card packs. However, NFTs can also be more artistic. Some artists have sold digital artwork for tens of millions of dollars, while others have embraced the platform even more, creating art that changes as it’s bought and sold.
Ownership of digital artwork may sound ridiculous at first: why would someone want to own a file that anyone can download? However, this concept is not too different from any other collectible, whether it be baseball cards, Pez dispensers, or famous autographs. These items have no intrinsic value and are easy to reproduce but still amass thousands or millions of dollars when auctioned.
Along with collectibles, NFTs allow digital artists to license their work in a way that benefits them and the buyer. Previously, digital artists made money selling high-quality copies of their art, though these were easily pirated. However, with NFTs, they are able to sell their artwork securely and make money off of those sales. NFTs also make art accessible to more people. Anyone can buy cryptocurrency and purchase a NFT anonymously, unlike with galleries, which typically want to vet a client before they buy art.
However, NFTs are important not because of their current applications, but because of their security purposes and use in the real world. The past transactions of a NFT can’t be modified by anyone other than by the current owner. This idea that the ownership of an item cannot be modified is incredibly useful because it makes it easy to verify who owns — and has owned — a given item.
While NFTs do have some downsides, the benefits they provide to artists, coupled with the security they offer, prove that they do deserve a place in society. So, the next time you see a monkey-smoking-a-pipe profile photo, don’t be quick to dismiss it as an image that you can simply screenshot. Instead, notice what this image represents, and how NFTs could be even more helpful in the future.