NFT's, Blockchain & Cryptocurrency Explained
So firstly, what exactly is an NFT (non-fungible token)?
A basic explanation of an NFT (Non-fungible Token) is it’s a digital verification of an asset. It basically stores something of value onto the blockchain and authenticates its originality. This something can be in the form of art, music, cars, videos and much more.
In terms of artwork, we understand the value of an original Picasso however digital art has always been so easy to copy we never know which is the original. An NFT stores an original piece on the blockchain (which cannot be changed) verifying its authenticity over copies.
NFT’s are units of data stored on a blockchain. All NFT’s are different and each has a digital signature that makes it impossible to be replicated and provide the owner with proof of ownership of the asset
So what are the benefits of owning an NFT?
The first benefit of owning and NFT is that you can be sure of the authenticity of what is being provided. This is the most important benefit as it is irrefutable and evident proof of ownership of the NFT, they are indivisible and cannot be distributed among multiple owners.
Secondly many NFTs are being created with varying degrees of rarity and utility (added benefits). Owning an NFT that has a high degree of rarity – a good example of this is the Black Onyx Ford Falcon GTHO Phase III in the Lloyds Blockchain Classic Car Auction which is 1 of 1 in its physical form and reflected as the only of its kind in this NFT auction collection.
Other aspects include the transferability, and the new creation of economic growth opportunities.
Are NFTs a relatively new technology?
An NFT has been around for some time, the history dating back to 2014 when Kevin McCoy created the very first NFT. Improvements in NFT platforms and blockchain technologies along with a wider adoption of blockchain and cryptocurrencies is now bringing NFTs into the mainstream. It’s widely believed that NFTs will be used in everyday life to store items of value well into the future.
How or why should people put confidence and trust into an NFT?
NFTs are a way of authenticating data on the blockchain, essentially recording information in a way that makes it difficult or impossible to change, hack or alter. There are obviously many different pieces of data that people create NFTs with which we encourage people to do their own research on, however NFTs as a technology are very secure.
What companies create NFT’s? How are they made?
The most popular form of NFT at the moment is for digital artists to provide their original artwork to investors and art lovers with verification of its originality.
What are the types of wallets and how many are there? What are digital wallets are accepted at Lloyds?
Each blockchain requires a wallet to store your items of value, whether that be cryptocurrencies (tokens) or NFTs. There are many different wallet providers however one of the more common used for NFTs is currently MetaMask which Lloyds accepts.
What is the blockchain and does the blockchain work?
If you think about blockchain as a box of data (regardless of what is stored in that data) those blocks of data are verified by thousands of decentralized computers around the world meaning that no one person, entity or computer can change its value or data.
The blockchain links all of these data blocks together creating a chain of secure data that cannot be manipulated.
Is Cryptocurrency related to NFT’s?
Cryptocurrency is a digital currency and like NFTs they are a technology that live on the blockchain, there is not a single blockchain.
There are various types of block chain – not a single blockchain each offering their own benefits, such as Ethereum, Polygon, Solana, etc.
In essence cryptocurrency is a common use of the blockchain for people to transact tokens of value like the financial system.
The difference between cryptocurrency and NFT’s is that NFT’s cannot be traded for each other as they are unique representations of real-world assets, whereas cryptocurrency is a form of money, and therefore has no loss in value and can be traded.
How are the NFT verified artworks delivered/transferred to the new owner?
One of the benefits of NFTs marketplaces using the blockchain is that they are built on smart contracts.
Smart contracts enable the automatic distribution of the asset once payment has been made along with a host of other benefits.
What is the future of NFTs?
Many people believe that NFTs will change the world as they same way the internet changed the world as an authentic store of value it has many use cases and could be used for not only authentic artworks but ticketing for events through to transfer of other digital assets.
So what are Lloyds thoughts on NFT’s and the Blockchain?
Lee Hames, Chief Operations Officer for Lloyds Auctions says its an exciting technology in which Lloyds are proud to present first edition classic car art NFT’s a blockchain world first. “It is important to note that people are not just buying a picture, in our case the digital 3D model is a representation of the value. The value is in the utility of the benefits included in the NFT.”
Alongside Blockstar Technologies Lloyds are working on creating further opportunities in being part of a world first digital verified blockchain NFT Classic Car Auction with their first one being held this September 25 at 8pm.
If you are interested in being part of the opportunity in owning a blockchain world first then check out the First Edition Classic Car Art NFT’s by clicking here.