Part 1: What Is an NFT?
“NFT” stands for “Non-Fungible Token.” It’s a bit of a mouthful, but simply put, think of it as a “unique digital certificate.”
To put it in real-world terms, think of it like a Pokémon card. There are many Pikachu cards, but let’s say there’s only one specific rare card in existence. That card is so valuable that it can’t be exchanged for any other card. NFTs work the same way. In the digital world, they serve as proof that you own a one-of-a-kind, special item.
Part 2: What Are NFTs Used For?
NFTs are used when buying and selling digital works—such as art, music, and videos—as “special” items. For example, when an artist sells a digital painting, an NFT is used to prove that the painting is “authentic.”
NFTs are also used to represent valuable assets in the digital world, such as special in-game items or land within virtual reality spaces.
Part 3: Why Do NFTs Have Value?
While physical objects (such as paintings or sculptures) can be held and examined, digital works can be easily copied. However, using an NFT allows you to prove that a digital work is “authentic.” That’s why it holds value as the artist’s original creation.
Part 4: How Are NFTs Created?
NFTs are created using a technology called blockchain. Blockchain is a special technology that stores data in a way that prevents tampering. When creating an NFT, you use a specific platform (e.g., Ethereum) to issue a certificate stating, “This is the authentic version of my work!”
Part 5: NFT Marketplaces
The places where you buy and sell NFTs are called “NFT marketplaces.” Popular marketplaces include “OpenSea” and “Rarible.” On these platforms, artists can list their works for sale, and interested buyers can purchase them.
Part 6: NFTs and the Environment
It is well known that creating NFTs consumes a significant amount of electricity. In particular, creating NFTs using the Ethereum blockchain requires extensive computational power, which consumes electricity. As a result, there is ongoing debate regarding its environmental impact. However, with technological advancements, methods to reduce this environmental impact are also being explored.
Part 7: The Future of NFTs
Since NFTs are still a new technology, there is much uncertainty about how they will evolve in the future. However, it is believed that NFTs will play a very important role as a means of indicating “originality” and “uniqueness” in the digital world.
In the future, NFTs may be used not only for art and music but also in various other fields, such as education, entertainment, and integration with real-world physical products.
Part 8: Things Not Related to NFTs
While an NFT serves as a “certificate of digital ownership,” it does not guarantee the quality or value of physical items (such as T-shirts or mugs). Furthermore, simply owning an NFT does not necessarily mean you hold all copyrights or usage rights to the work. It is important to thoroughly verify all information before buying or selling.
Part 9: Determining the Value of NFTs
How are NFT prices determined? This is primarily based on market supply and demand. If demand for a specific NFT is high, its price tends to rise. This demand is shaped by many factors, such as the artist’s reputation, the rarity of the work, and community support.
Part 10: Storing NFTs
Once you’ve purchased an NFT, you need to store it securely. Typically, NFTs are stored in a digital wallet. This wallet is the same as a cryptocurrency wallet and is designed to securely manage your NFTs. To avoid losing your valuable NFTs, it’s important to pay attention to wallet backups and security.
Part 11: NFTs and Copyright
Purchasing an NFT grants you ownership of the digital art, but this is distinct from holding the copyright. In many cases, the artist retains the copyright to the work. Therefore, while NFT owners can resell the work, they are often not permitted to use it in advertisements or on merchandise.
Part 12: Potential Issues with NFTs
The NFT boom has also drawn criticism. In addition to the environmental concerns mentioned earlier, other issues have been raised, such as speculative market trends, copyright infringement, and how to ensure the originality and authenticity of works.
Part 13: New Uses for NFTs
Currently, new uses for NFTs are being explored. For example, selling event tickets or access rights to specific services as NFTs can emphasize their uniqueness and associated benefits. There are also efforts to use NFTs as certificates of completion for education and training.
* We are the official distributor of RedotPay in Japan.