Emerging digital assets with risks and hopes of getting rich quick

A year ago, digital documents using NFT technology (NFT) were almost completely unknown, and this technology is a non-replaceable token encryption method that allows the award of a blockchain-based certificate that proves the authenticity of any digital product.

These digital documents documented with NFT technology have become a major driver of art auctions in recent months, and their price in auctions reaches millions of dollars, since the record price achieved by the American artist Pebble for a digital work with this technology, which amounted to 69.3 million dollars, during an auction by Christie’s. last March.

The emerging NFT technology for digital documentation has profoundly changed the arts and culture market and has become a major driver in the auction world, but its use remains complex for beginners and entrepreneurs in this field.

Few people had heard of "NFT", a non-replaceable code encryption method that allows for a certificate of authenticity of any digital product, whether it is a photo, emoji, video, music track, press article, etc.

And here comes a tour of these "digital holdings", after it was recently sold - in a French auction - the first SMS in history, in the form of "NFT".

What is NFT technology?

NFT is an acronym for "Non-Fungible Token", meaning "non-fungible token", and stands for the inability to exchange any coin for an equivalent (example: exchanging a $5 banknote with another of the same category).

NFTs can be defined as traceable "digital holdings". In concrete terms, it is a contract whose terms are defined by an informational code for a virtual or real good.

These rules can limit the number of copies available for sale, allow for "reissue," or regulate a revenue distribution system that allows the original employer to receive revenue for each transaction.

NFTs can be defined as traceable "digital holdings". In concrete terms, it is a contract whose terms are defined by an informational code for a virtual or real good.

"NFT" has become a new type of digital asset, similar to cryptocurrencies such as "Bitcoin" that uses blockchain technology (Blockchain), that is, a document reference that is shared by a large number of individuals without a central authority.

How is it used?

As with cryptocurrencies, it is possible to buy and sell NFT on specialized platforms.

During the process, the buyer does not necessarily obtain the specified piece, but is only given a Blockchain-registered Certificate of Authenticity to change ownership.

To maintain the rights in this certificate, a digital wallet is necessary, whether it is a program in the form of an extension to an Internet browser, or a secure connection in the form of a USB bus.

Before buying, payment must be made in cryptocurrency, but it is also possible to “create” an NFT piece by yourself, relying on some skills in the field of informatics.

What are the risks?

Buying, selling and using NFT is still technical and sometimes poorly understood, which can put small and novice investors at risk.

For every interaction with the blockchain, there is a need to pay expenses for those who take care of verifying transactions.

A recent report published by the specialized platform "Chain Analysis" indicated that buying a newly created "NFT" from a waiting group is a very competitive process, as thousands of users hope to buy at the same time.

In this case, many transactions fail, but the fees are still due and sometimes high depending on the price of the cryptocurrencies that are often used to pay them.

But some buyers are determined to succeed, and may use bots (robust software to place orders), making the transaction more ambiguous for the novice investor.

The study concluded that in 2021, “a very small group of experienced investors captured the bulk of NFT Groups profits.”

Who buys it?

Buyers are especially collectors or speculators who hope to make a profit by reselling them later at a higher price.

The "NFT" was the focus of many auctions that caused a global stir, including, for example, the sale of the first tweet of Twitter founder Jack Dorsey for $2.9 million.

They are also used in video games, cinema and music, and have also been the focus of unusual initiatives, including, for example, buying virtual land or raising virtual racing horses.

A very small group of experienced investors captured the bulk of NFT Group's profits.

While recent auctions aim to attract traditional collectors to the world of NFT, the priority is also to attract new net worth, or Geeks, who have made millions in fortunes thanks to the skyrocketing value of cryptocurrencies.

This market, which is directly connected to the world of cryptocurrencies such as Bitcoin, includes private exchange platforms such as Nifty Gateway and OpenSea, which were created on the fringes of the art world.

Celebrities are turning to digital documents

This month, former US first lady Melania Trump launched her own non-fungible tokens (NFT) platform, the latest public figure to enter the field.

"I proudly announce my new endeavor in NFT technology that embodies my passion for the arts and will support my continued commitment to children through the Be Beast initiative," Melania said in a statement.

"Through this new technology-based platform, we will equip children with computer science skills, including programming and software development, with the aim of prospering after they are out of the caring community," she said.

The first work with NFT technology will be a watercolor by French artist Marc Antoine Colon, entitled “Melanes Vision”, which will be available for purchase until the end of the year at the price of 1 sol, the cryptocurrency of the “Solana” blockchain protocol (about 150 dollars). .

Melania Trump NTF will run on Solana, and will accept payments in cryptocurrency, Sol and credit cards. This is Melania Trump's first public project since she left office a year ago.