The NFT Craze: A Simple Breakdown
by Farida HajiWhat on Earth Is An NFT?
NFT stands for Non-Fungible Token. The terms ‘non’ and ‘token’ are simple to understand. It’s the ‘Fungible’ part that has people raising their brows.
Commodities, shares, and dollar bills are simple examples of fungible goods. Something that can be replaced, duplicated, or mutually exchanged. However, assets like land and precious stones cannot be called fungible as they have certain unique qualities that aid in evaluation.
So, what is non-fungible?
Non-fungible is the opposite; it cannot be taken from you, exchanged, or duplicated. Once an NFT is created, it remains as it is for eternity.
Mike Winkleman, an artist who goes by the name of Beeple, recently sold an NFT artwork for US$69 Million. Whoever bought it, now owns this digital painting.
NFTs are possible because of a technology called blockchain that promotes the idea of a distributed ledger. A distributed ledger is a consensus of replicable ledgers in the hands of numerous people spread out over multiple countries. Anybody who is part of the blockchain can keep a record of another person. This system is the opposite of a bank, which is centralized and keeps information and ledgers confidential in one location. Essentially, the difference is the availability of information: banks keep it private while blockchain is open for all involved to see.
This blockchain technology is the Non-Fungible part of NFT. Since everyone keeps track of what you own, no one can be cheated or scammed. Almost any digital content can be converted into an NFT. You may create a digital house, art, music, a 3D model of Burj Khalifa, sell or buy it and no one else can steal ownership from you. In fact a beloved GIF, Nyan Cat, we use at Muslim Pro is an NFT worth US $600,000.
Digital Gold or a Fool’s Errand?
Futurists believe that in the world of digital scams, there is finally a way to patent digital material. Instead of relying on mega-conglomerates like Facebook, Microsoft, and Google to create a ledger of websites or digital material, ordinary citizens can use blockchain technology to keep track of what individuals own.
However, realists are not quite sold to this idea. There is a grey area. No matter who owns the NFT, it is not a full-proof way of stopping someone from making a black-market copy of it.
For example, if you owned the US$69 million artwork that Beeple sold, it may not be in your authority to stop anybody else from taking a screen capture and printing it on a T-shirt. However, you can claim to own it without question or dispute. The access of who claims ownership is what blockchain allows.
Is it of Value?
Physical commodities will always have value. There is a demand, it can be sold, you can own it and it cannot be taken from you (unless through a scam). Think about a pair of jeans. It is made, there is a cost of production. It is sold for a profit and you can wear it to protect your legs and look decent in public. It exists somewhere. There is a value associated with it. No one is clicking on “copy-paste” and duplicating it.
Can anything digital, even if it were an NFT, ever have that kind of value?
Maybe.
Creating NFTs is a new way to digitize content and sell it without an intermediary. Giving power to the layman. NFTs are valuable because they verify the authenticity of a non-fungible asset. This makes these assets unique and one of a kind. So it’s a pair of digital jeans or digital Adidas shoes that only you own. This way the internet can grow with the creation of new marketplaces and new forms of investment.
Lord of the NFT
The pressing question is, is the entire world ready for NFTs? Probably not. Right now everyone is excited about it because of the money it is generating. Millions for a painting. Even a tweet, that fetched over $300 thousand. That is indeed a lot of money.
However, in a practical sense, it’s not extremely valuable. You can do nothing with a digital commodity except see or hear it. It serves no other purpose.
Note that trading and money evaluation differ. Digital and real-life currencies are different (a discussion for another day).
Regardless, it may not be a substantial reason to dissuade others from ‘investing’ in NFTs. As long as artists can sell their work in the thousands and people can trade the said artwork for millions, NFTs are going to stay.
Is it haram to invest in a NFT?
Wow !! That’s fantastic. Theme how do we go about it .
Why is this on Muslim pro, this is nothing Islam related and further NFT can be seen as a form of gambling. This is not a very halal post. Muslim pro is going downhill for a reason, first the privacy breach and now the irrelevant notifications and posts. Fix up!
Learning about something and making informed choices is up to us. At Muslim Pro we are working towards creating a community and sharing information about technology, lifestyle, and keeping up with the times. However, we thank you for your support and suggestions. Alhamdollilah. May Allah Bless you and bless us as well Inshallah.
Jazhakhallah khair for the fatwa.May Allah keep us all on the right path.
Are nft halaal?
Its very useful information thanks
Jzakallah
It is very useful
I came to know completely about nft from here
Can u please guide us how to make it
Don’t trust iy
Ok
So when you put your money into the bank, do you think it just sits there waiting for you. No, it does not! It is used for all sorts of things that are probably not halal.
Pls what do the scholars have to say about this. I mean the Islamic ruling that can be applied to this NFT
A very easy way to understand NFT is think of it like you buying someone elses grocery receipt that says milk on it. You don’t own the contents that comes with that receipt in this case it’s “milk” you only own the receipt which is the NFT itself. Now the milk itself is just a visual representation of the NFT. You don’t HAVE the milk but you do have the receipt which basically means NOTHING in other words you buy nothing. This is how the blockchain newest technology are being used at least for now
How do I get engaged in NFT?
Assalamoalikum! Great information about NFT. Waiting for another article difference of real and digital currency.
Are NFT’s halal ?
Assalamualaikum!
This is indeed a great information for some of us that has no idea what NFTs really are. Jazak Allahu akhair
So my question is, if one is interested
How do you now go about it.
Maybe the next article should be on that.
Thank you for this information.
So how do one go about NFTs if interested?
Another reader has shared interesting video links for a better and more insightful understanding of NFTs. Do check them out, research on a personal level, and make informed decisions. – Nour
What has this got to do with Muslim pro. This would have been an interesting article if you were to discuss if it was haram or not especially for people who are wanting to create.
We are a lifestyle app and strive to share with the Muslim Ummah about current ongoings as well. Inshallah, we shall try and do a follow-up article to address the queries thoughtful readers like you are putting forth. Shukran.
– Nour
Cool and amazing, it’s a legitimate business idea
What makes an nft halal or haram? I have been looking online and not that many people can give a definitive answer.
Interesting thing, Shukran knowledge is power.
I’ll just leave these two links here. Explains everything one needs to know.
https://youtu.be/0pWTRsztTtY
https://youtu.be/YQ_xWvX1n9g
Spoiler alert, in the long run, they’re bad.
Brother Mohsin, extremely informative links, thank you so much for sharing, will definitely help the other brothers and sisters who are quite intrigued by this article. And, yes the videos also point out the extremely problematic aspect of NFTs. Shukran for sharing once again. – Nour
I would like to know more about this
Is selling NFT’s halal or haram?
If you want to create an NFT collection for charity and to help fund your ambitions, please let me know! I have my own NFT project I am working on but would definitely love to help you brothers and sisters for free!
Hello Brother Mohsin, that is kind of you to share with us, maybe you could write about it here in the comments for more understanding. Shukran. – Nour
Thank you for this information. It’s useful for us keep up to date on all these new technologies.
Without any negativity or bias
What Islamic NFTs are out there. Are they doing more good or harm for the Ummah. How should Muslims tackle these situations. Should we teach our kids about this for them to keep as a tool when they get exposed to this info in the years to follow
Hello Brother Omair, thank you for your appreciation and questions. Seeing the interest, the Muslim Pro content team shall try and do a follow-up article and answer queries that our readers are putting forth. Inshallah. – Nour
Why is this article on Muslim pro?? So stupid.
Brother Moez, Muslim Pro is also a lifestyle app and we are striving to keep the Muslim community abreast with the current news and information present in the world. As Muslims, to gain knowledge is our right. Inshallah.
A/alaikum,please you are a lifestyle app,but specifically for “Muslims”. Therefore you should note that lots of Muslims look up to you for guidance from whatever you post.Thinking that whatever you post must definitely be halal.Please you should therefore be careful in what you’re posting In order not to mislead the Ummah.No matter how popular it is.The most important thing is: Is it halal or Haram ?
Another way to sustain ourselves, and its fair, i,I, for it.
The author gave an informative content on the NFTs very good to know for the Muslim Umma when deciding to invest such virtual commodities. However, he fails to draw a line between what is considered as Haram or Halal for the investors. After reading this article I felt this is nothing more than QUTHWATHUS SHAITAN can any body who knows Islamic financing give a fatwa and draw line between permissible and non permissible. Jazak Allah Khair
Good content. Good explanation of nft and Blockchain that everyone can understand. However, you missed a few things of the future of nfts. It’s is not without value and not only for people to look at. The art aspect of it yes is. But if you widen the scope you’ll see the value of nfts. Plane tickets, contracts, leases, etc are in the future of nfts. Since these are non fungible documents placing them on the Blockchain will allow any entity to verify the owner of the asset and the details are the asset with no way of altering or malicious changes tot the asset.
Honestly a very well written piece. It just seems that at the end it showed only one side of the future of nfts.
As we learn and share our understanding, we are glad that thoughtful readers like you take the time and respond. Alhamdollilah. it gives us motivation and allows us to explore diverse content for our community and readers. Thank you. Maybe we will try to do a follow-up article that is more detailed. Do keep a lookout. And share our content with your friends and family. – Nour