Two years ago, right before the COVID-19 pandemic hit, the
world was all awash in new digital technojargon. Things such as blockchain, virtual
currencies, Bitcoins, Ethereum were just starting to pick up steam.
But as the Remote Workforce took a permanent hold on our
society, these technojargons became a reality to everybody. For example, the Bitcoin was all the craze,
and pretty much the entire world saw how you could make a quick profit from
this, as well as huge losses.
The blockchain was the next big technojargon to come out,
because the virtual currencies resided on this platform. Now with the normal financial markets
tanking, the value of Bitcoin has also dropped off greatly, as people now have
to do deal with the issues of using real currencies.
But as the markets go up, it is also expected that some
point in time, the virtual currencies will also. Maybe not so fast as it did before, but it
will.
So until this happens, there is yet another new digital term
that is now picking up the lag. This is
what is called the “Non-Fungible Token”, or “NFT” for short. Technically, it can be defined as follows:
“An NFT is a digital asset that represents real-world
objects like art, music, in-game items and videos. They are bought and sold
online, frequently with cryptocurrency, and they are generally encoded
with the same underlying software as many cryptos.”
(SOURCE: https://www.forbes.com/advisor/investing/cryptocurrency/nft-non-fungible-token/)
The concept of NFTs is really nothing new, and in fact it
has been around since 2014. It’s first
public attention when a digital collection of artwork created by an artist
known as “Beeple” sold for an almost jaw dropping $70 million. So remember the Mona Lisa by Picasso?
It’s digital representation can now be called a Non-Fungible Token (I am
going on the assumption that is out there on the digital superhighway).
So really in the end, NFTs are nothing but digital
representations of objects that exist in the real world. It is a great way for people with $$$$ to get
access to physical items, but in its virtual form. But as the key differentiator here is that
NFTs can only be purchased with a virtual currency, such as the Bitcoin. Traditional currencies won’t work in this
market arena.
At the present time, the NFT market is worth well over $41
billion, and is expected to grow in the near future. Now that you hopefully have a little bit
better understanding of what an NFT is, a future blog will go into all of the
technical details of how the whole process works.
Also, keep in mind that using an NFT is a great way for the
creative class (such as artists, musicians, novelists, etc.) to protect their
original works of art. Also, it gives
the owner the bragging rights that they own the digital version of an original
creative piece of work, which makes NFTs so expensive.
But with the good comes the bad. Because of its rapid growth and market value,
NFTs are now also becoming hot prey for the Cyberattacker, just as much as the
Bitcoin was (the Cyberattacks that occurred here are known as “Cryptojacking”). How is this happening, you may be
asking? It can through seven different
ways:
1)
Impersonation:
This has proven to work quite
effectively with Social Engineering and Deepfakes, but in the world of the
NFTs, this is becoming a problem. For
example, a Cyberattacker a can easily set up a phony website, using the name
brand of popular sports figure, for example.
From here, fake NFTs can sold through an account that the buyer has to
set up. But rather than getting the NFT,
they are simply transmitting their login credentials that can be used for a
subsequent attack (such as ID Theft), or which can be sold on the Dark We,
2)
Illegally produced NFTs:
Even though NFTs are protected by
encryption to some degree, it is still not enough. If a person knows what they are doing, the
NFT can be easily replicated, and made into a counterfeit. Unfortunately, the copy right laws are
extremely murky here, so if you want to take somebody to court and sue them for
the illegal replication of an NFT that you claim is originally yours, good
luck. The courts are not equipped to
handle these kinds of las yet.
3)
Phony platforms:
Just like virtual currencies,
creating a brand new NFT platform is quite easy, as long as you can get your
hands on the source code to do so. With
this in mind, it is very difficult to know what is for real and not, because
again just like the virtual currencies, NFTs are an unregulated marketplace. So if you feel that you have been a victim in
this regard, there is very little that law enforcement can do, at least for the
present time.
4)
A currency that cannot be traced:
By its very nature, virtual
currencies cannot be tracked down easily, because it is digital. And since this too is an unregulated market,
there are no audit trails that can be built to track the Bitcoin (for example),
unlike the traditional currencies. So if
you feel that you have been scammed for paid for a fake, you are going to have
a very difficult time getting your money back.
My Thoughts On This:
I have always wondered what NFTs are, so I am finally I got
to write something about it today. There
will be more articles about this in the future as well, but the next one will
give you the technical overview of it, as promised earlier. Honestly, I wonder what the craze for NFTs is
really about.
Sure, you may own the digital version of some creative work,
but to me that is not owning the original.
I would much rather own the latter, as I feel that you gives
you more bragging power, and you can probably even sell that for a higher price
in the marketplace than you could for the NFT version. I really can’t say at this point just how far
NFTs will go.
There is the potential they could go on for a long time, but
also crash and burn like the .com craze of the late 90s.
But keep in mind that those items that are worth having the
most are those that you can hold, touch, and feel. But that is my two cents worth. While the world is going digital, make sure
to take the time to enjoy what is in the physical also.
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