NFTs Explained for Australian Business Owners

NFTs Explained for Australian Business Owners

NFTs explained for Australian Business Owners.

The business of Non Fungible Tokens, or “NFTs” for short, has grown exponentially in recent years. And when something is getting as hype as NFTs have, it’s hard not to take at least some notice. 

Cryptocurrencies, blockchains and non-fungible tokens are great buzzwords. They sound exotic, serious, and quirky all at the same time. But the Non-fungible tokens have had a disproportionate share of free PR in recent years, especially here in Australia. 

So what is an NFT? 

In short, NFTs are ownership agreements. They are the contract between you and something else. They are not the asset or item you own, any more than an old school, printed out and co-signed agreement is that sits in some old school filing cabinet. 

But what that agreement stands for can be worth everything. 

Example: 100 pages of paper printed with a couple of signatures on the last page is worth about 1c. But if that printed-out document says you own 10% of BMW, that’s another story.

You see, NFTs are, in themselves, just the agreement. But what they can say that you own is the difference. 

So why not stick with printed-out agreements …didn’t they work just fine? 

Sometimes yes. Sometimes no.

To understand the difference, you need to understand blockchain technology and why it’s different to other digital technologies. 

Blockchain technology is 100% transparent. Everyone can see precisely what transaction took place. But blockchain technology can never be changed, augmented, or deleted. It’s like a tattoo.

Paper-based agreements can get lost, damaged, misinterpreted etc. 

So to have this wholly transparent and eternal record of ownership is something special. Mainly when you’re talking about the verification that you ‘own’ something of great value. 

An NFT establishes a unique smart contract between the buyer and the seller of an asset — which can vary from illustrations of Bored Apes at a Yacht Club, recorded music, or even real estate. There’s no limit to the assets’ categories to which NFTs can be applied. 

They are simply a digital record of ownership that is 100% transparent, verifiable and eternal. 

Importantly, they’re also 100% sellable, and this combination of factors makes them so valuable as means by which you can secure, prove and resell ownership over assets.