There's nothing like an explosion of blockchain news that makes you think, "Um... what's going on here?" This is the feeling I got while reading about Grimes getting millions of dollars for NFTs or selling Nyan Cat as one. And by the time we all thought we kind of knew what the deal was, the Twitter founder put out a signed tweet for sale as NFT. Now, months after we first posted this explainer, we're still seeing headlines about people paying home for rock clip art — and my mom still doesn't really understand what NFT is.

You might be wondering: What is NFT anyway? Well, let's start with the basics

What is NFT? What does NFT stand for?

Token is not replaceable.

This does not make it more clear.

Right, sorry. The word 'irreplaceable' more or less means that it is unique and cannot be replaced by something else. For example, Bitcoin is exchangeable – exchange one for another, and you get exactly the same. However, a unique trading card is not exchangeable. If you exchange it for a different card, you get something completely different.

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports NFTs, which store additional information that makes it work differently than, say, ETH.

What is it worth to have in an NFT supermarket?

NFTs can really be anything digital (like graphics, music, downloading your brain and turning it into AI), but a lot of the current excitement revolves around using technology to sell digital art.

Do people really think this is going to be like collecting art?

I'm sure some people are really hoping for that - like who paid nearly $390,000 for a 50-second video by Grimes or the guy who paid $6.6 million for a video by Beeple.

What is the purpose of NFTs?

It really depends on whether you are an artist or a buyer.

I'm an artist.

First: I am proud of you. I did well. You may be interested in NFTs because they give you a way to sell work for which there may not be much market. If you came up with a really cool digital sticker idea, what would you do? Selling it on the iMessage App Store? No way.

Also, NFTs have a feature that you can enable that will pay you a percentage every time an NFT is sold or changed, making sure that if your business is very popular and balloons value, you will see some of these benefits.

I am a buyer.

One of the obvious benefits of buying art is that it allows you to financially support the artists you like, and that's true with NFTs (which are way more trendy than Telegram stickers). Buying an NFT will usually give you some basic usage rights, such as the ability to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with the introduction of a blockchain to back it up.

NFTs can act like any other speculative asset, buying them and hoping that one day their value will rise, so you can sell them for a profit. But I feel so dirty talking about it.

Post a Comment