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What is an NFT?

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Why would anyone want to own an JPEG image that they could just screenshot? Turns out, NFTs are more than that. In this lesson we’re breaking down exactly what an NFT is, how they work, and the various uses they can have.

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What’s an NFT?

NFT stands for non-fungible token. Non-fungible means it’s one of a kind. NFTs let us “tokenize” (a way of securing data by making it inaccessible to external parties) things like art, collectibles, even real estate! As described by Ethereum.org, NFTs can only have ONE official owner at a time and they’re secured by the blockchain – no one can change the record of ownership or simply copy/paste a new NFT into existence.

 

How do NFT’s work?

 

Most NFTs are part of the Ethereum blockchain, but they also started to be issued on many other blockchains including Solana, Terra, Tezos, & Flow. All of these blockchains can support NFTs, which store extra information that makes them work differently from a cryptocurrency.

Digital Art, GIFs, Collectibles, Music, Videos or even Real World Items like tickets to a real world event, invoices, legal documents, and a ton of other things! Here’s a good way to think about this… your concert ticket could be an NFT because it’s unique – in fact, every ticket is unique. Each NFT ticket represents a different show on a different date with a specific seat.

 

So what’s the point of NFTs?

 

The Verge does a great job of breaking down how an artist and art buyer might benefit from the NFT world.

 

If you’re an artist, NFTs give you a way to sell work that would be hard to market elsewhere. If you come up with a really cool digital avatar idea like this, what are you going to do? Sell it to a gallery? Probably not.

If you’re an art buyer, purchasing and owning an NFT lets you financially support artists you like. Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. 

Here’s a good way to think about it: you could have someone paint you a fake Picasso, but it’s just not the real thing. So it wouldn’t hold any true value. Owning an NFT is similar because there’s only ONE real version. And when you own it, there’s a proof of ownership on the blockchain.

 

Who would pay hundreds of thousands of dollars for an NFT?

 

Wellllll… a lot of people you may have heard of (or wish you hadn’t heard of) like Logan Paul, Lindsay Lohan, Snoop Dog, Tony Hawk, and Shawn Mendes among other celebrities. 

 

But NFTs aren’t just for the rich & famous and they don’t always cost the same as a trip to space. Big brands like Marvel have launched their own NFTs, which are aimed more at traditional collectors and not just crypto-enthusiasts.

So even though your mom still might not know what an NFT is, there are plenty of people buying, selling, and creating NFTs. 

No account yet? Register

cryptocurrency

What is an NFT?

Why would anyone want to own an JPEG image that they could just screenshot? Turns out, NFTs are more than that. In this lesson we’re breaking down exactly what an NFT is, how they work, and the various uses they can have.

What’s an NFT?

NFT stands for non-fungible token. Non-fungible means it’s one of a kind. NFTs let us “tokenize” (a way of securing data by making it inaccessible to external parties) things like art, collectibles, even real estate! As described by Ethereum.org, NFTs can only have ONE official owner at a time and they’re secured by the blockchain – no one can change the record of ownership or simply copy/paste a new NFT into existence.

 

How do NFT’s work?

 

Most NFTs are part of the Ethereum blockchain, but they also started to be issued on many other blockchains including Solana, Terra, Tezos, & Flow. All of these blockchains can support NFTs, which store extra information that makes them work differently from a cryptocurrency.

Digital Art, GIFs, Collectibles, Music, Videos or even Real World Items like tickets to a real world event, invoices, legal documents, and a ton of other things! Here’s a good way to think about this… your concert ticket could be an NFT because it’s unique – in fact, every ticket is unique. Each NFT ticket represents a different show on a different date with a specific seat.

 

So what’s the point of NFTs?

 

The Verge does a great job of breaking down how an artist and art buyer might benefit from the NFT world.

 

If you’re an artist, NFTs give you a way to sell work that would be hard to market elsewhere. If you come up with a really cool digital avatar idea like this, what are you going to do? Sell it to a gallery? Probably not.

If you’re an art buyer, purchasing and owning an NFT lets you financially support artists you like. Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. 

Here’s a good way to think about it: you could have someone paint you a fake Picasso, but it’s just not the real thing. So it wouldn’t hold any true value. Owning an NFT is similar because there’s only ONE real version. And when you own it, there’s a proof of ownership on the blockchain.

 

Who would pay hundreds of thousands of dollars for an NFT?

 

Wellllll… a lot of people you may have heard of (or wish you hadn’t heard of) like Logan Paul, Lindsay Lohan, Snoop Dog, Tony Hawk, and Shawn Mendes among other celebrities. 

 

But NFTs aren’t just for the rich & famous and they don’t always cost the same as a trip to space. Big brands like Marvel have launched their own NFTs, which are aimed more at traditional collectors and not just crypto-enthusiasts.

So even though your mom still might not know what an NFT is, there are plenty of people buying, selling, and creating NFTs. 

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