What is an NFT?
So you may have heard the latest tech buzz word circulating around is “NFT”, which is short for “Non Fungible Token”. So what is a Non Fungible Token anyways?
I guess the most obvious answer is that it is a token that is not fungible. In other words, it is a completely unique digital file. It could be an image, or a recording, or even written text. Heck, even a screenshot of a tweet has been made into an NFT.
Using the same technology that Bitcoin is built on, NFTs are basically part of an enormous ledger that is maintained on a block-chain. If a bunch of those words make your head spin, don’t worry, you are not alone. But it’s worth getting familiar with these terms and the tech since it’s very likely that our future will be built on it or tech like it.
So why does an NFT have value? Well in much the same way any art or even paper money for that matter has value, it’s because people agree that it has value.
Take this picture of a can of Avocados for instance.
This is simply a picture of a can of Avocados, but because it is an NFT, we can actually make it a one-of-a-kind digital image. Sure you can own a copy of the image just like you could download a copy of the Mona Lisa (not to compare this delicious can of Avocados to the Mona Lisa, but you get my point).
Because the image is listed on the block-chain, it can be owned, bought, and sold as an extremely rare item. Think of this listing as a certificate of authenticity, but it includes the entire history of each sale right back to it’s inception.
Let’s say the creator says this is worth $1, and someone else decides I think it’s worth $2 so I’ll buy it for $1 and then resell it for a profit, then it has value as a vehicle for speculation.
Or maybe you just really like Avocados and want to own the image for yourself.
The really cool part is that as long as the internet exists, so will these NFTs. And just like any market, it’s bound to get flooded with loads of crap, but the stuff rises to the top will be exceptional and more than likely, extremely valuable.
Oh, if you want to check out that can of Avocados for yourself, just click HERE