NFTs stand for a non-fungible token. So, what does that mean? Blockchain has created a proliferation of new terminology and developments in our new digital marketplaces that have left many scratching their heads. The non-fungible part refers to the unique nature of the token in question. It is irreplicable.
NFTs are implemented by blockchain and delivered by a cryptocurrency operating within that blockchain. NFTs can be used to buy anything digital and so far have been used to buy art work and music, for example.
There have been a number of high-profile sales using NFTs for seemingly eye watering price tags. Last April a digital work of art by the contemporary artist Beeple, fetched US$69.3m in an online auction at Christie’s. It is not just art that is tokenised and sold. Twitter's founder Jack Dorsey has promoted an NFT of the first-ever tweet, with bids hitting US$2.5m. Ownership is recorded on the blockchain and transferred using that blockchain’s cryptocurrency. It represents an exciting chapter in the innovative use of blockchain and in the evolution of digital assets.
In the financial world
At Sibos 2021 Bank of America unveiled a special NFT delivered to some of its select customers, saying the following, ‘Bank of America is committed to innovation that meets the challenges of a changing world. This year at Sibos, we’re introducing Bank of America’s first ever NFT: a limited edition, digital collectible, available exclusively to our clients. Built with PALM, a sustainable and energy-efficient platform, it’s one of our many initiatives – like converting US$271m in paper cheques to electronic payments that are helping to preserve the planet we share.’
The NFT is committed to the bank’s work around sustainability as outlined above and was issued at Sibos, and a few weeks before the issue reached its apex at the COP 26 United Nations Climate Change conference in Glasgow this month.