What are NFTs?
First of all, we have to talk about what is an NFT. NFT is an acronym for Non-Fungible Token. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, something that is “fungible” can be exchanged with an equivalent item, for example, a $5 bill with another $5 bill. Cryptocurrencies, which use a digital public record of transactions called a blockchain, are fungible. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. You gave up a basic Counterspell, and got an Alpha Black Lotus, which is the single most valuable printed card in the game of Magic published in a standard set (peaking at 21.000EUR). It would be a magnificent deal for sure.
NFTs are digital items that can be bought and sold using this blockchain technology. But they are not fungible, making them a different type of asset. In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.
Although that may be far from simple for the uninitiated to understand, the payoff has been huge for many artists, musicians, influencers, and the like, with investors spending top dollar to own NFT versions of digital images. For example, Jack Dorsey’s first tweet sold for $2.9 million, a video clip of a LeBron James slam dunk sold for over $200,000, and a decade-old “Nyan Cat” GIF went for $600,000. We wrote about the Dune book that was sold for $2.66 million.
What can you read in the future about NFTs
NFTs as investment
How the video gaming industry uses NFTs
NFTs as virtual art collection
NFTs that are scam
Behind the code of an NFT
Anyone can create an NFT. All that’s needed is a digital wallet, a small amount of crypto, and a connection to an NFT marketplace. Where you’ll be able to upload and turn the content into an NFT or crypto art. Simple, right?