Explaining NFTs and custody solutions

Mar 31, 2021

Non-fungible tokens (or Niftys) hit the global press recently, following the sale of a piece of digital art from the artist Beeple. It was only for a the small sum of $69million - nothing to write home about...

Naturally, a sale of this volume turns heads. People in the know may question why someone would be willing to spend a fortune on something digital, or they'll completely understand the purchase as an investment, as, after all, this is simply another asset and clearly one of value.

This also raises the attention to people outside the blockchain community. The figure drives hype; social media posts and speculation; along with the odd news report on the BBC trying to make sense of NFTs. Whatever the result may be, raising awareness of blockchain technology is never a bad thing, as many people, organisations, and open source communities strive for mass adoption of the technology and crypto assets.

Understanding exactly what NFTs are, how they work on the blockchain (commonly, Ethereum), and what their place will be the financial services in the future is crucial to their success and positive impact on us all. Putting the technology to one side for a moment, an NFT can be anything digital - a piece of art, a trading card, an item in a video game, or perhaps a plot of virtual land (remember Second Life?). They can also be tied to a physical item and used as an immutable record - Rolex have tested this concept when selling their luxury watches. What's important is that the owner of the NFT is in hold of something unique, they own the rights and can chose to do whatever the wish with with the asset. This has the potential to revolutionise rights, ownership, and payments for something like music. An artist can finally take complete control of their work, and be rewarded in full. Their potential is extremely far reaching.

To tell us more about NFTs, I recently spoke with Alex Batlin, Founder and CEO at Trustology who provide cutting-edge crypto-custody services. Alex lives and breathes DeFi, so there's no better person to explain NFTs to us and their future within financial services.

Join us on the latest episode of our podcast, The Tech Stack: