A non-fungible token (NFT) is a unique financial security feature consisting of digital data stored in a blockchain and a distributed ledger for digital assets. NFTs assign a specific code to digital assets that can audit and track activities such as sales, purchases, and ownership.

The digital asset does not have to be unique; there can be a thousand versions of one asset. However, using blockchain, the asset is given a specific code, thus creating a unique asset. Digital assets can be anything represented in digital form, that is art, music, video, software, electronic documents, etc.

An NFT is how you show ownership. From the perspective of art, you buy the artwork and the NFT is the artwork’s form. The art itself is valued based on the artist and the artwork.

The challenge with digital assets has always been ensuring that the value of that digital asset remains the same after repurchasing/multiplication of the original copy. In other words, these digital assets can be sold to another party for even a higher value than the original price but the creator will not reap the benefits of these third-party sales. There needs to be a system to ensure that as the creations change hands and increase in value, there is a record and the creators get their due.

Blockchain technology facilitates an immutable record of the creation of NFTs, assigning the code that makes it unique, and keeping track of every transaction related to the assets. With the strength and security of blockchain technology the ability to forge NFT-coded assets is almost impossible, as it is complicated to develop counterfeits.

NFTs can be described as investments, though there are risks. When looking to invest in NFTs you should have the same mindset as if you’re investing in real estate or stock.

Currently, the most accessible NFT marketplace to get on to is OpenSea. It is free to set up an account. Then, you can start minting your creations on the website. Minting refers to converting digital files into crypto collections or digital assets stored on the blockchain. Minting is dependent on crypto. In the Caribbean banking sector it is still tricky to buy cryptocurrencies; therefore, people in the Caribbean region must communicate with third-party apps to purchase the currency. Subsequently, there is a cost to create the NFTs, impacting the asset’s selling price.

The marketplace does not impact the value of the NFTs; however, community activities may affect the volume, similar to stock values that are susceptible to inflation and deflation.

Contributed by Adrian Dunkley, president of the Jamaica Technology and Digital Alliance; Alexia James, digital market manager of Mystique Integrated Services Limited; Trevor Forest, chief executive officer of 876 Solutions; and Bonito Thompson, chief executive officer of DonDada, on behalf of the Jamaica Technology and Digital Alliance.