NFTs are all the rage right now. Here's why | Economic Times

Good morning,If you have any interest in technology, and -- this is just a wild guess -- you probably do, you may have come across the acronym NFT this past week. We at ETtech certainly did. We decided to look into what NFTs are, what all the hype is all about, and whether they're just a passing fad or the foundation of something truly revolutionary.Grab your coffee and settle in.NFTs: digital trinkets or much more?Non-fungible tokens, or NFTs, are hotter than a barbeque in May right now.Here's what they are, and why the world has gone NFT-crazy in the past two weeks.Fungible (adjective): Replaceable by another identical item; mutually interchangeable.For all their differences, that Rs 100 note in your pocket and a single Bitcoin token (worth around Rs 35 lakh as of writing) share one important thing. They are no different from any other Rs 100 note or bitcoin. They were designed, as all currencies are, to be mutually interchangeable.NFTs, on the other hand, are a class of crypto assets in which each item, or token, is entirely unique. This makes them useless as a currency, but quite useful for other things.Such as? Well, creating digital art, for one.And because this is shiny new technology, and we're human beings, and this is the internet, NFTs first went mainstream as -- you guessed it -- cats.Created in October 2017, Cryptokitties is a virtual game that allows players to adopt, raise and trade virtual cats.From its website: "CryptoKitties is one of the world's first blockchain games. 'Blockchain' is the technology that makes things like Bitcoin possible. While CryptoKitties isn't a digital currency, it does offer the same security: each CryptoKitty is one-of-a-kind and 100% owned by you. It cannot be replicated, taken away, or destroyed."So that's it? Virtual cats? Not quite. A lot has happened since, especially in the past two weeks, during which NFTs have turned from the nichiest of niche pursuits into a straight-up global obsession.The Big Bang: On February 15, 2021, the venerable Christies, founded in 1766, became the first major auction house to announce plans to sell a purely digital piece of art -- an NFT created by digital artist Mike Winkelmann, aka Beeple.Called Everydays -- The First 5000, it comprises, as the name suggests, 5,000 individual images created every day from 2007 to 2021 and posted on Beeple's Instagram.If you think that's absurd, get this.An hour after the auction began on Thursday, the price jumped from $100 to $1 million.Alex Rotter, Christie's head of 20th and 21st century art, was understandably quite excited, writing: "#Beeple leads the way. It's all happening" on Instagram.As we write this, the going price is a cool $2.4 million, with 121 bids. The auction ends 12 days from now on March 11.Cryptokitty's all grown up.But are NFTs just the latest fad, we hear you ask? They could be.For one, most NFTs currently exist on a single blockchain - Ethereum.And because humans gonna human, their use is for now largely restricted to creating and selling digital trinkets. Multi-million dollar trinkets, but trinkets nonetheless.It can also be tricky and time-consuming, not to mention energy-intensive, to develop decentralised applications for NFTs.There are also teething issues, too technical to go into here, around the protocols used to create them.That said, they could very well be the next big thing. Truly big. Not for cats and giggles, or a digitally encoded version of this epic LeBron James dunk (which sold for $208,000 on Monday), but for more sober and practical uses.Such as? The most obvious use of unique, hack-proof virtual tokens is storing all kinds of data, private and public -- from your birth certificate and health data to land records and much, much more.More importantly, they could one day revolutionise the way we create and execute agreements to exchange money, shares, property, or virtually any asset through smart contracts. These digital contracts could one day do away with the need for a third-party arbitrator, such as a court, and instead use a computer program on the blockchain to confirm that the conditions have been met.Now that would be revolutionary. - Zaheer MerchantLet's move on to other big developments of the week, and there were plentyINDIA'S NEW DIGITAL MEDIA RULESOn Thursday, India notified new regulations that call for sweeping changes in the way social media platforms, news portals and streaming services are regulated. This could result in messaging apps losing their biggest selling point for millions of users in India, in the form of end-to-end encryption. WhatsApp said it is currently evaluating "all options", adding that the app remains committed to offering users end-to-end encryption on its platform.The new rules also call for self-regulation by streaming platforms while expanding the definition of digital media. News portals are now mandated to follow similar norms that govern traditional media publishers, such as newspapers and television news channels.81239130THE NUE RACEThe opportunity to build an NPCI rival is attracting proposals from stakeholders ranging from tech giants to local upstarts and domestic conglomerates.Reliance Industries is eyeing a licence in tie-up with Google and Facebook while the Tata Group has taken over State Bank of India's bid that was earlier flagged by the Finance Ministry on account of potential competition risk. Tatas will now co-promote the consortium with HDFC Bank, Kotak Mahindra Bank, Airtel, MasterCard and PayU. Also in the fray is Amazon in partnership with ICICI Bank and Axis Bank and a Paytm-Ola-IndusInd Bank combine.Meanwhile, the Reserve Bank of India extended the application deadline on Friday from February 26 to March 31 in view of the pandemic.DEALS IN THE WORKSDream11 parent Dream Sports is in talks with a clutch of investors including Abu Dhabi's Alpha Wave Incubation for a fresh round of funding, three people in the know told ET. The round is expected to be in the range of $300 million, valuing the firm at around $4 billion.Fintech startup Razorpay has held discussions with its existing investor Singapore's sovereign investment fund GIC and others to raise $150-200 million in a financing round that could see its valuation nearly double to $2 billion in less than six monthsReliance Industries' Jio Platforms is finalising an investment of up to $200 million in domestic venture capital fund Kalaari Capital, according to two people in the know of the matter. The Mukesh Ambani-led conglomerate has closed a $100-million infusion, with an additional commitment of $100 million slated for later, said another person aware of the group's plans.81239111Grofers will likely make its public market debut through a merger with New York-based Cantor Fitzgerald's blank-check firm, sources told ET. The online grocer is expected to raise between $400 million and $500 million through a NASDAQ listing in May, at a valuation of more than $1 billion.Private equity Carlyle Group has emerged as the sole bidder to acquire Blackstone Group-owned Mphasis, in what would be the largest buyout in the Indian IT industry, said multiple people involved in the deal. Blackstone's 56.12% stake in Mphasis is valued at Rs 17,280 crore, based on the IT firm’s market cap of Rs 30,791.82 crore at the close of trade on Friday.81239100OTHER BIG STORIES BY OUR REPORTERSThe tide seems to be turning on pandemic's 'Work from Goa' trendOnly 30% of those from the tech circle who moved to Goa during the pandemic may consider staying back for long. It could imply that they were choosing a better quality of life over better career prospects.Many Indian techies get paid in crypto, say it's faster and easierInternational crypto companies are hiring engineers and back-end developers in India as contractors and paying them in cryptocurrencies to accelerate their adoption and bypass local taxes and laws regarding cross-border payments.Snap plans to take its India localisation strategy to the worldSnapchat chief executive Evan Spiegel said that Stories has become the largest revenue stream for the company, despite substantial competitive pressure.Indian fintech lenders grab turf from China as Google begins app clean-upMost domestic fintech lenders that ET spoke with said that their business rose 20-40% month-on-month since December, when the crackdown started.That's about it from us this week. Have a great weekend!