You may have heard the term NFT before and wonder what it is. NFT stands for Non-Fungible Token. An NFT is a blockchain (you can see our article on crypto currency for a definition of the block chain) based cryptography asset with a different, non-fungible, identification code that makes each token unique.
NFTs can really be anything digital (such as drawings, music, videos), but a lot of the current excitement is around using the tech to sell digital art. 2021 started off like a rocket, but crypto and NFTs have really taken a beating this year, so it might be a good time to pick up some NFTs cheap.
NFTs really became technically possible when the Ethereum blockchain added support for them. An early application was a game called CryptoKitties, players could trade and sell virtual kittens. A more mainstream and common source of NFTs today is NBA’s Topshot. NBA Topshot is a blockchain-based platform that allows fans to buy, sell and trade numbered versions of specific, officially-licensed video highlights. An example of a highlight is located here. Right now these are basically digital trading cards, but the future is truly unknown. NBA TOPSHOT even offers a digital marketplace to buy and sell the NFTs, so if you have a favorite moment or player, you can certainly lock that in now.
What makes it a NFT?
In more detail, these cryptographic assets on the blockchain have unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged easily or fungibly. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can be used as a medium for commercial transactions. One bitcoin is the same as any other bitcoin, but an NFT is unique, each one slightly different.
Non-fungible tokens appear to be an evolution over fungible cryptocurrencies. Some would argue that these are the future of the modern art world, real estate world, and our entire finance system. Modern finance systems consist of sophisticated trading and loan systems for different asset types, ranging from real estate to lending contracts to artwork. By enabling digital representations and identification of physical assets, NFTs are a step forward in the move to a more digital based world.
So What’s the Big Deal?
It is hard to understand why someone would pay for something that can be seen on the internet for free. The technology behind the NFT and newness of NFTs is leading to interest, but it is unknown if the values are supportable long term. Trading cards on your phone vice in your closet may also be more appealing to people that live more digital lives. The current craze have many wondering if NFTs are here to stay or if they are the next beanie babies. They will likely find their niche somewhere and settle into something like baseball cards or pokemon cards, a collectible with a following, but they could become the new way that Art is bought, sold, traded and viewed. You just never know.
If NFTs are not for you, then think about sticking with the tried and true gold, silver and copper.
CryptoCurrency
Lastly, if NFTs are not for you and you are looking to get into the crypto world, but just want to dip your toe in, think about fungible crypto currencies. The market is pretty wild right now, but you might find a dip. You can also check out the modern dad topics article on Crypto here. Or sign up using these links below.
When you sign up for Coinbase, please use this link.
If you sign up for Bittrex, please use this referral code of XX0-C32-ZPK.
When you sign up for Binance, please use our referral code 54731047.
Coinbase appears to be the most popular and just went public, so if you don’t think cryptocurrency is for you, but want to invest in a company that handles crypto transactions, check them out.
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