NFT

What is an NFT?

An NFT (a non-fungible token) is a record on a blockchain documenting that a particular digital work belongs to you. With an ordinary image on the internet it is hard to say who its true owner is, and this is exactly the question an NFT is meant to solve. Put simply, it is a digital receipt of ownership.

How does it work?

The work is tied to a token stored in a blockchain, a shared and indelible record. That record holds who the token belongs to and how it has been transferred between owners over time. When you sell the work, the transfer is entered into the same record, so the ownership history remains traceable.

Why does this matter to a collector?

NFTs opened collecting to purely digital work, which previously lacked a clear way of documenting who owned it. At the same time this is a young and unsteady segment, where prices can shoot up and fall just as sharply. A collector should therefore weigh up whether it is the work itself that interests them, or merely a short-lived wave of attention.

What should you watch out for?

A good example is the sale of Beeple's work at Christie's in 2021, which set off an enormous boom around NFTs — followed by a steep fall. It turned out that while a great many projects burned out, the genuinely best works held their value. The lesson is that with NFTs too, quality decides, not the excitement of the moment.

— Anna Pulkertová, founder of Art Part Club