If you’ve kept up with the activities of celebrities, you’ve likely stumbled across non-fungible tokens or NFTs at some point. They’ve gained traction as various celebrities used the cryptographic token to fund their business ventures. For instance, artist Chris Torres sold a digital version of his Nyan Cat meme for nearly $600,000 through NFTs. The first NFT artwork was unveiled for sale recently at Christie’s, a major auction house. A Cristiano Ronaldo card sold for nearly $300,000.
With all the significant attention NFT is getting, it will revolutionize the job market and change the way people transact. Here’s what you need to know about NFTs, how they work, and what they mean for the hiring landscape:
All About NFTs
NFTs are a type of cryptographic token that symbolizes a specific digital asset. It uses blockchain technology and works like other cryptocurrencies, such as bitcoin. NFTs involve networked computers competing against each other to solve complicated mathematical functions to secure and encrypt data and create a private cryptographic key. However, what sets NFTs apart is that they are non-fungible, which means that tokens are not identical or interchangeable, essentially making them like blockchain-verified artworks. All pieces of artwork hold different values both monetarily and artistically, and each NFT is issued a unique digital hash that separates it from other NFTs.
Even though NFTs gained traction recently, they have been around since June 2017. CryptoKitties, a digital cat trading game, was the first initiative that launched NFT to popularity in the crypto crowd when it hit the headlines later that year. People have since spent over $174 million on NFTs.
The Unique Value of NFTs
NFTs change the game by subverting the most widespread use of blockchain and cryptographic ledgers, which is for logging transactions, by marking a specific piece of digital asset and assigning it to a particular cryptographic token. For this reason, NFTs are usually created to represent image files in different formats such as JPEG, GIF, and PNG, although they can also be attached to digital files. Individuals can own and exchange digital assets, which are naturally shareable and thereby easily copied, through NFTs to have the privilege of owning them.
In essence, NFTs function like the serial numbers that tech and designer companies assign each of their products to allow buyers to verify their authenticity. However, in NFTs, there isn’t an authority assigning these numbers, similar to how no central bank issues new bitcoins. Most of the NFTs currently circulating today are built on Ethereum. Each NFT is created to symbolize a specific piece of digital asset authenticated by the network. When people buy and trade NFTs, the token encrypts their unique identifier, specifying who owns it. Then, it is distributed to the entire network, which means anyone with access to the network can view ownership information. However, they cannot access the NFTs themselves unless they have the cryptographic key to them, which only the owner has.
How NFT Transforms the Value for Digital Goods
Digital goods are incredibly popular given the rise of online technology. However, until the arrival of NFTs, they weren’t valuable to collectors since these goods were easily copied and distributed. With the technology NFT uses, it is now possible to amass digital collectibles since it engineers digital scarcity. Following economic principles, scarcity creates value, opening an incredible opportunity for consumers.
Since NFTs make it easy to trade digital goods without bringing the risk of copying them, they’ll be more likely to shoot up in value, mainly when the history of ownership is visible to everyone in the network. Many companies have begun to capitalize on this by licensing their content and IP to Ethereum and minting them into digital collectibles. NFTs can also be used to include digital assets like real estate, brand licensing, and even event ticketing.
NFTs present a world of exciting opportunities that will inevitably change the job market. However, it is still unknown to many people outside the crypto world, although it carries an exceptional potential for revolutionizing many industries. Stay tuned for part 2 to learn more!
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