NFTs: A Temporary Fad or Here to Stay? You can do this with it and you should be aware of this! – Radar

The headlines about NFTs are flying around us. But what exactly are NFTs? Is it a temporary fad? And what exactly can you do with it? Radar talked about this with technology and science journalist Krijn Soeteman.

Soeteman is also currently working on a crypto encyclopedia and is the author of the book ‘Cryptocurrency for Dummies’.

What is an NFT?

NFT stands for non-fungible token, meaning something that is not interchangeable and technically unique. It links ownership to a unique digital object through a smart contract. ‘Smart contract sounds very legal, but it’s not, it’s not a contract. It is actually a very simple, small computer program’.

It was born out of the quest to create something unique on the internet, something you can’t copy. ‘There has been a lot of research into this since the 1980s. The first system that could do this very well is Bitcoin. If I give you a Bitcoin, you can be 100 percent sure that I don’t have it anymore. This allows you to bring unique transactions from A to B’, explains Soeteman.

Nothing is unique in the digital domain. You can copy everything very easily. To make sure you can’t spend something twice, like money, we use banks and other third parties to check it for us. ‘But if they go bankrupt or if someone doesn’t like that party, it becomes difficult in terms of how to deal with that ownership.’

He continues that it can also be very difficult with works of art, for example. ‘If you buy a piece of art now, you get a paper contract with it. Such a paper also states who the work previously belonged to. It’s easy to look at it. If you buy or sell digital art, it becomes even more difficult, and the question is whether the company that conveys the rights will still exist in thirty years, when you might want to sell it’.

Applications NFTs

An NFT is therefore a collectible that is sold digitally through blockchain technology. Some examples of these objects are the images you may have seen from Crypto Punks and Bored Ape Yacht Club, among others. In jargon, these kinds of pictures are called ‘collectibles’.

It is of course very strange that people pay large sums of money for this. But Soeteman explains that there are several sides to the story. “You have the people who have gotten extremely rich in crypto in the past. They just think it’s interesting, fun, or just want to act a little tough, and it doesn’t matter to them.’

In addition, it is very easy to sell something to yourself back and forth. “To the outside world, it looks like something is actually being sold. They have an image and sell it to themselves, e.g. for one Ether, then buys it back for six, and so on. Before you know it, that picture is worth a lot and you can make money by selling it to other interested parties.’

There are also celebrities who buy these collectibles. ‘Then of course you quickly get into a kind of madness that makes you wonder what it’s really about.’

What else can an NFT be used for?

Soeteman himself believes that this hype of images will transform into something more useful. ‘In this way, you can link different properties to a smart contract.’

You can think of concert tickets that are sold in NFT form. Concert tickets are often collectibles already, but then you have a digital form with which you can bind fans. “Imagine that anyone who bought such a ticket before a certain time would get early access to the album or get extra coins for the bar.”

You can therefore link all sorts of things to it, which is now easier to personalize because it is linked to your personal wallet. The technical journalist is therefore curious about how this will develop socially, especially on the Internet. However, he thinks it’s a shame that many things have been hijacked by large companies.

What should you pay attention to when buying an NFT?

And what are the ‘red flags’? Soeteman: ‘What often happens is that fraudsters work in an increasingly sophisticated way. So pay close attention to what exactly it says if you have to give approval to something and check the link so that your wallet is not suddenly empty. It is also advisable to use Google Image Search so you can find out if the image already belongs to someone else and is now being sold by someone else.’

Finally, he says that ultimately everything about NFTs has to do with real money. ‘You can experiment with it, but don’t let it fool you!’

Source: Krijn Soeteman

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