What is a NFT?
As lawyers, we recently wrote the terms and conditions for a NFT metaverse open world game. An open world game, in which you can also buy NFT.
But what exactly is a NFT? And what can you do with it? NFT lawyer explains. What is a NFT?
NFT a unique token
An NFT is a “non-fungible token.” It is a link on the blockchain of a unique digital item. An NFT is unique.
That is the main appeal of an NFT. It can be used to create (for example) a work of art or a unique avatar, which the user is willing to pay a significant crypto amount for.
Simply put, the NFT has its own unique code. The NFT is not replaceable. The standard used cannot be replaced by anything else. Therefore, for many, the value is not in the NFT itself, but in the fact that it is unique. Think of the first copy of an important book. That first copy is (logically) the only one available. Therefore, in some cases, it is also worth a lot.
Usefulness of an NFT
That all sounds rather abstract and the question you might have is: what is the use of it? One benefit is that it cannot be copied. Digital works of art have been created for this reason. For example, artist Beeple sold the artwork “Everydays: the First 5000 Days” for a whopping $69 million. That sounds like a lot and it is. The NFT artwork took the artist up to 13 years to complete.
Another example is the first tweet. This was sold as an NFT for millions.
NFTs could prevent counterfeiting. For example, an NFT could be used to prove that the NFT is real and not counterfeit. An NFT can also be attached to a physical product, which can then be used to prove authenticity. For example, an NFT can be obtained with the purchase of clothing, watches, luxury goods. From the unique NFT it then follows that the product is genuine. An NFT is therefore sometimes compared with a certificate of authenticity. That is not the whole story, because an NFT in itself can also be (for example) a work of art.
As a lawyer, I follow the developments closely.