fbpx
Blog

WTF Is An NFT?

So, by now you’ve probably heard about NFTs. Maybe you’ve seen the term on social media or heard your friends talk about it, and vaguely know that it has to do with cryptocurrency or art or something and has something to do with Grimes or digital cat pictures. If you’re feeling stumped, you’re not alone. I’ve broken down the basics for you about WTF is an NFT—and once you’ve read this, you’ll have the tools to make your own NFT.

NFT= non fungible token

“Non fungible” more or less means that it’s unique and can’t be replaced with something else. In contrast “fungible” would be something you could trade for something else and have the exact same thing. So money and bitcoins are fungible because if I gave you $10 and you gave me $10 we would have the same thing. But if you gave me a signed Babe Ruth baseball card and I gave you a signed Britney Spears poster, we wouldn’t have the same thing. Those items are “non fungible.” Next, the token part, which has to do with the digital nature of this asset. It lives on the blockchain. Blocks would be individual transactions or records that are strung together on a single list called a chain. We most commonly use blockchain these days to refer to digital currencies like Bitcoin, but it can store signatures or intellectual property.

What are NFTs a part of?

Right now NFTs are part of the Ethereum blockchain, although others are starting their own. Ethereum coins are like Bitcoin in that it is a kind of cryptocurrency but it would be like we are talking dollars and euros. NFTs are different from Ethereum coins, which are fungible, remember, because they hold more information and are, you guessed it…non fungible or unique. Are you still with me?

What can be an NFT?

Anything digital! Digital art, your tweet, music…anything but a lot of the current excitement is around art specifically. So, let’s double click on that and I’ll give you some examples. Someone paid $390,000 for a 50-second video of Grimes and $6.6 million dollars for a 60-second video by digital artist Beeple. And a Cucci ghost gif that sold for $3,600 is reselling right now for $16,300. Some people think this is the future of art collecting. It makes sense if you think about it. It gives creators another platform to sell their stuff and there is a feature that everytime it is resold, the creator gets a cut.

What About The Buyers?

On the buying side, it gives buyers basic usage rights, like bragging and posting about it with a blockchain entry to show for it. But here’s where it gets weird. Er, it can be copied. Like you could literally have a copy of that Beeple video that sold for 6 million bucks. Think of it like art. There are a bunch of replicas of a Monet painting, but only one original, just like there could be lots of numbered trading cards. Because the barrier to entry is low, some people are also thinking this is like Pokemon-collecting. You literally post your tweet or anything right now on an NFT and if someone wants to buy it…cool! It sort of means that when it comes to NFTs, anyone can be an entrepreneur.

How Do I Go About This?

Anyone can get in on the NFT game! So, where exactly? There are a number of different places, such as OpenSea, Rarible, and Nifty Gateway. If you want to go bid on a tweet or put your tweet up for sale, you can go to Valuables by Cent (as in dollars and cents). All of these sites are essentially marketplaces. Just remember that if you sell your tweet, you don’t get dollars, you get cryptocurrency, which is…on the blockchain! You got it. Now go out there and make your own NFT!

A version of this article was originally published on Forbes.

GET OUT OF DEBT AND BECOME FINANCIALLY FREE

I'll teach you my 3 simple, life-changing habits to get control of your money!

Hide
Open
Hide
Open