NFTs: What Are They?
NFTs or non-fungible tokens are the latest trend in the booming cryptocurrency industry. Recently there was a piece of art, wait, DIGITAL ART meaning not tangible that sold for 69 MILLION DOLLARS. No that is not a typo. You may or may not have heard that and were taken aback, but welcome to the world we are moving towards as more and more things become digital. Think about it, if 20 years ago someone said you could send money, order food, clothes, etc. with the touch of a button would you have believed them? Probably not, and its why you should have an open mind as we begin to transition into this area of our world and society.
What is it?
Non-fungible means that its unique and cannot be replaced with something else similar to that old pack of trading cards you had as a kid. Think of an NFT as a unique proof of ownership over something you can't usually hold in your hand — art, audio, videos, items in video games, other forms of creative work. It's a one-of-a-kind piece of code, stored and protected on a shared public exchange.
How does it work?
They are a part of the Ethereum blockchain which you may have heard of, but it is a form of cryptocurrency like bitcoin. However, the blockchain Ethereum is supported by also stores extra information than an Ethereum coin for the NFT's that are stored on it.
What are they used for?
Most recently a lot of digital art has been sold in the NFT marketplace like the $69M Beeple art I mentioned. This is where a lot of people see this market staying. However, you are beginning to see mainstream pickup on this with the NBA releasing the NBA Top Shot platform for people to own highlight reels. Time will tell the other items of interest in this new marketplace.
What do NFT's look like moving forward?
It is certainly up for debate as some value NFT's in the realm of trading cards and others like fine pieces of art. The odds are it will be somewhere in the middle, but no matter where it ends up this is where we are headed in the future as more and more of our lives and the things, we do become a part of the blockchain.
Should it matter to me?
It truly depends on your vantage point on
things. Some will brush this off as nothing and others will fully embrace it
and want to jump into investment in the space or even purchase NFT's
themselves. Time will tell the ultimate verdict, but a good rule of thumb is to
not dismiss anything that is catching fire like this as we have seen our lives
and society transform completely in just the last 10 years.