What is a non-fungible token? | CAR Magazine

What is a non-fungible token?

Published: 01 November 2022 Updated: 01 November 2022

► CAR explains the NFT
► What car makers are getting involved?
► What are NFTs actually for?

If you’ve managed to avoid knowing anything about the letters N, F and T put together, congratulations. They’re spreading fast in the worlds of finance, art and social media. But now car makers are getting in on the trend, so it’s time we got to grips with them.

NFT stands for ‘non-fungible token’, a unique thing like a piece of artwork that people can own but has no physical form, and can only be owned in the digital universe. It’s stored as a collection of data on a blockchain (which is essentially a digital register that isn’t controlled or influenced by one person, organisation, or government) that marks who owns it. Think of it like buying a real painting; the artist may still control the copyright, but someone can buy the artwork and get a receipt as proof of purchase. In relation to digital artworks, or any other kind of digital media, the receipt is the NFT.

NFTs have exploded into a multi-billion-dollar pursuit with all the Wild West peaks and pitfalls of the stock market, and it’s got trendsetters and cryptocurrency zealots hooked.

Most of the car makers who have so far got involved seem to view it as a way of making money and getting talked about, generally by tapping into the vast world of NFT art. Porsche has commissioned artwork to be digitally applied to images of its Taycan (see above), Alpine designed five racing liveries for its GTA Concept, and Rolls-Royce went with an edgy artist to promote its Ghost Black Badge. But there are other uses, too. Potentially the most practical is deploying blockchain technology to create a digital logbook that securely records a car’s service history, with the option for the owner to add pictures, trip details and so on.

But NFTs are not without problems. Blockchain tech requires continuous computing power, consuming so much energy that it has a similar carbon footprint to the whole of Hong Kong. And some analysts suggest we have already seen the peak NFT transactions, and the market is waning. Even so, automotive brands see it as another revenue stream. Anything for a quick buck, eh?

Car makers getting involved in the NFT universe

Lamborghini
Hunks of carbonfibre composite were taken into space in 2019 and upon their return they had QR codes engraved on them. Each ‘Space Key’ (seen above) shows an exclusive digital artwork.

Chevrolet
Buy the below artwork, get a free Corvette ZO6 in this colour – the first ZO6 produced. At least that was the plan but, at the time of writing, no one bought it at auction. Ouch.

Alfa Romeo
The new Tonale, as well as the facelifted Giulia and Stelvio, come with something akin to a digital trading card, logging the vehicle’s data. The aim of having the entire service history registered securely is to help resale value.

By Jake Groves

CAR's deputy news editor, gamer, serial Lego-ist, lover of hot hatches

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