There’s nothing like an explosion of NFT NEWS to leave you thinking, “Um… what’s going on here?” That’s the feeling I’ve experienced while reading about Grimes getting millions of dollars for NFTs, or about Nyan Cat being sold as one. And by the time we all thought we sort of knew what the deal was, the founder of Twitter put an autographed tweet up for sale as an NFT.
Now, months after we first published this explainer, we’re still seeing headlines about people paying house money for clip art of rocks — and my mom still doesn’t really understand what an NFT is.
What Is an NFT?
An NFT NEWS, or non-fungible token, is a type of cryptocurrency. Unlike many other types of tokens, which are typically used to represent something fungible (i.e., something that can be measured and exchanged for goods or services), an NFT represents one unique object. When you purchase an NFT, it’s important to know that you’re buying the object itself, not just a representation of that object.
Why Should You Care About NFTs?
But the reason you should care about NFTs is that they represent a wholly new form of ownership. They allow you to bequeath your belongings to someone else, and they also give access to your digital assets.
NFTs can be anything from collectibles like rare dolls or albums, to digital objects like an email address.
What Are Some Legitimate Uses for NFTs?
No matter how much we try, NFTs are still pretty messy. So, what are some legitimate uses for them?
NFTs are useful when it comes to ownership of digital assets. What does this mean? When you buy an NFT, you can sell it, trade it, or collect it without the worry of the asset being copied by someone else. You can also transfer your copy to someone else if you’d like to.
NFTs also apply in situations where people might want to keep their data private and secure. For example, a social media company could issue an NFT that would allow users to log in without having to provide any sensitive information.
Finally, they have the potential to disrupt intellectual property law when it comes to digital content. We see this happening already with things like music or art streaming services.
How Do You Get Started in the NFT news World?
It’s actually pretty simple. The first thing you need to know is what an NFT is.
So, what are they?
An NFT is a tokenized object that has been converted into a digital asset on the blockchain. So when you’re looking at your representation of a physical object in the form of an NFT, it’s not exactly the same as holding it in your hand — you’re just holding a token that has been linked to this particular asset.
This distinction might seem like semantics, but it’s actually very meaningful. It means that someone can always create another digital copy of an item and sell it to someone else if the original owner wants to sell theirs or give it away, so there’s no sense in owning anything exclusively anymore. It also means that these items can’t be counterfeited because each one will have its own serial number and unique ID on the blockchain.
