What are NFTs and Why Do They Matter?
Technology attorney Samir Patel was quoted in American Songwriter about non-fungible tokens (NFT), a type of cryptocurrency that can hold assets such as art and music. Kings of Leon released their new album in the form of an NFT, becoming the first major musical artist to ever release an album this way. NFTs operate on a blockchain, which is a publicly accessible and transparent network — meaning anyone can see the details of any NFT transaction. It is impossible for an NFT transaction to be hacked because there is a massive network of computers involved. What this means in a practical sense for NFTs is that their value is very much like the value of a stock – it fluctuates and can be highly subjective and quite volatile.
“Any NFT is nothing more than ownership over metadata – no other ownership rights are transferred,” said Mr. Patel. “NFTs can be the nexus between real property and its ownership on a blockchain, like a digital deed. They can serve as tickets to an event or a certificate of provenance for a diamond. These types of applications require much more trust and collaboration between blockchain developers and public/private enterprises, but art as an NFT, is low-hanging fruit for the technology.”