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“Non-fungible tokens” (or non-fungible tokens in French) make it possible to authenticate digital objects, but also in reality. Uncontrolled, they can pay big or… nothing.
Appearing in 2018, NFTs designate both digital asset certificates and objects. They remain largely unknown to the French: according to an Ifop survey for Cointribune, only 8% of them know what they are and 3.5% have bought them. Insights from Claire Balva, Co-Founder of Blockchain Partners and Director of Blockchain & Crypto-Assets at KPMG France.
Paris match. What is an NFT?
Claire Balva. It is a token built on a digital infrastructure called blockchain that represents a specific asset, which can be digital or physical. We talk about a non-fungible token because the main characteristic of an NFT is its unique nature. Unlike cryptocurrencies like bitcoin, which are fungible: one bitcoin is worth the same as another bitcoin. NFTs are not equivalent to each other.
What are the most common uses associated with NFTs?
The first sector concerned is video games, thanks to the advent of freely accessible games, monetized through the sale of objects, weapons or facilities. Until now, a video game’s assets were partitioned into its database, without the possibility of being used elsewhere once the game was finished. Put in the form of NFTs, these assets can be resold, or even promoted to other platforms outside of the main game.
Before investing, it is necessary to conduct a thorough analysis of the issuer, platform
NFTs have spurred the emergence of new practices…
They make it a collection of sorts and ensure that a digital object is unique, or that it exists only in a limited number of copies. Based on these principles is based the model of Sourer, a start-up that raised the largest fund in France in 2021 (680 million euros). He created a fantasy football game out of collectible digital player cards.
How to explain the rise of NFTs in the artistic world?
A work can be represented in the form of NFT, which serves as a certificate of ownership and authenticity. NFTs can designate both digital objects and associated certificates. Entirely digital creations such as pictures or clothing can be sold in the virtual universe. This is what drives luxury or sportswear brands to invest in NFTs, especially for marketing reasons.
Also read. A virtual home sold for over $500,000
What precautions should be taken before investing in digital artwork?
It is impossible to position yourself without understanding the universe of cryptocurrencies. Beyond aesthetics, the NFT issuer, the platform that markets it, needs to do a detailed analysis by interrogating price history. Such purchases should only be made with the rationale of diversifying his savings in an ancillary way. One exception to these principles: buying a work by your favorite artist, if your driving force is not the expectation of a capital gain.