What's NFT?

What is NFT?

NFTs has been pretty popular lately, people talk about it and honestly, "What is NFT?". NFT (Non-fungible Token) is a unique digital identifier that cannot be copied and has been recorded in the blockchain for authenticity and ownership. So each NFT has their own unique identifier from one another, which make them different from one another. NFT is like a skin in a game like CS:GO where every skins are unique, has different pattern, spray. and etc. And each of them has their own id or identifier, which make every one of them unique. And NFT itself can be traded or sold with one person to the other. NFT can be created from many digital files, such as for photos, video and audio. The NFT we have been seen a lot are usually photos, but there are also audio file and video. For example you can make you music be fungible and use it to become NFT to proof your ownership as the music creator.

Nyan Cat

(Source: Wikipedia)

NFT itself has become a hot topic lately because the price action and how its been valued. For example "Nyan Cat" NFT has been sold for almost $600000, which makes people wondering why a digital picture that can be copied can be so highly valued.

(Source: YouTube)

Ownership and Copyright

NFTs can actually be used for other things rather just for tradeable things. As example for music creator, they can use it as their proof of ownership as the legal owner of the music and for copyright.

Characteristics

Now that we know NFTs has their own identifier number for each of them, now we will look into the characteristics of NFT in the blockchain world. NFT(Non-Fungible Token) as the name implied is a token. Its different from the other blockchain like for example bitcoin. Bitcoin is a cryptocurrency meanwhile the one NFT use is a blockchain called token. Token and cryptocurrency is different, by example Ethereum are able to make NFT and the process itself is called "Minting". 

Ethereum

(Source: Wikipedia)

The Problem

With how NFT was valued and how people treat them as only a piece of art. Many has been speculated that NFT can be used to do tax evasion by people. Which is why it also become an issue as for how the government will treat them in the future.

Reference

https://en.wikipedia.org/wiki/Non-fungible_token

https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

https://ethereum.org/en/nft/

https://www.forbes.com/sites/insider/2022/04/07/nfts-taxation-and-enforcement-are-around-the-corner/?sh=330161302d65

https://www.nytimes.com/2021/02/22/business/nft-nba-top-shot-crypto.html