Unless you’ve been living under a rock the past few weeks, you’ve likely heard the term NFT thrown around in the news cycle. After digital artist Beeple sold his Everyday collection for a record 69 million USD, NFTs made headlines everywhere, and had many of us asking, What are NFTs?
In one sentence, a Non-Fungible Token (NFT) proves ownership for a digital asset.
The term “non-fungible” means that it cannot be replaced which implies uniqueness. For example, the Mona Lisa is irreplaceable and unique. These two traits imply scarcity and scarcity usually increases value.
Before, you couldn’t make digital assets such as online videos, images, or gifs unique or irreplaceable. But now blockchain based authentication has made it possible to do this with NFTs.
Right now, NFTs are currently in a hype cycle. Some people are spending absurb amounts of money on seemingly trivial content. The concept also sounds ridiculous to some and even myself at first. Why spend all this money on a digital asset that I can download for free?
But beyond the hype cycle, at its surface, I believe in the fundamental premise of NFTs, especially for creator economics. But I’ll have to do more research of my own before I make any stronger takes.