What on earth is an NFT?

What is an NFT?

NFT stands for Non-Fungible Token. At the most basic level, this essentially means a completely unique item. Unique, irreplaceable, and non-interchangeable.

Naturally, fungible is the opposite. That bank note in your pocket is fungible; You can swap that $10 bank note for somebody else's $10 bank note and it will still allow you to purchase the same $10 of goods. Stocks and shares are another example of a fungible item. An MP3 music file is fungible because you can copy all of the data exactly, and the new file will give you exactly the same musical experience as the original. A blank sheet of A4 paper is fungible too... and so on.

Examples of non-fungible items

  • A physical painting - there is only one Mona Lisa. It lives in The Louvre and you might have selfies of yourself standing in front of it. There may be some pretty close reproductions but there is only one real Mona Lisa: Only the original has real value.
  • A house - sure, the neighbour's house looks the same and has the same layout (and they even copied your interior decor!) but it's not in exactly the same location as yours. Plus, their's is a little closer to the supermarket. It's unique.
  • A cinema ticket - but wait? Aren't all tickets for the same movie, at the same time, in the same cinema, basically the same? Not exactly, no. Your Twilight ticket is for seat F15 and mine is for F16. These are two slightly different experiences of the same movie. I'm looking at the screen (and questioning my life decisions) from a slightly different angle, and the floor is definitely stickier where I'm sitting. It's unique.
  • Queen Elizabeth II - irreplaceable and immortal.
  • You get the idea.

NFT's are the future of art!

Why? Because art NFTs give us so much more than traditional art. They live on public blockchain technology, and so even if they are purchased by a private collector, they don't vanish into somebody's downstairs bathroom for the rest of eternity; everyone can still see, appreciate, and enjoy them. How many amazing Picasso paintings will never see the light of day because they're hidden away in some dusty attic?

Blockchain technology allows us to see and verify exactly who created a piece of art, when they created it, how much they sold it for, everyone who has every purchased it, and who owns it now. It's all completely public information. Found a cool piece of art that you want to buy but don't know how? You're just one click away from finding out who currently owns it and how much they paid. Useful if you want to make them an offer.

This technology is tamper-proof. If you attempt to copy an NFT, you're simply creating a new and unique NFT, produced by you and not the original artist/creator. Sure, you can then sell this copy to someone, but it is provably not the original. We like that! How much money have art investors wasted on highly-convincing art that turned out to be fake?

When you purchase an NFT, you own it. Only you have the password. Nobody can take it from you, not even governments. You can sell it instantly to anybody else in the world if you choose to —no inspections at international borders. No clumsy courier can break it by turning a corner too quickly on the highway. You can't accidentally spill coffee on it. Mr. Bean can't draw a new face on it.

One of the coolest features? NFT's don't need to be static. They can move just like the paintings in Harry Potter. Mine do! You can own a rare animation, a movie, a game, a virtual reality experience, a collectible item. You name it.

Should you buy NFT's?

This is the beginning of a revolution. No, really. The NFT world is about to explode with innovation and not just in the art sector. The world is evolving.

It won't be long before everything runs on blockchain technology. You can already get loans and buy houses with it! No awkward chats with a snooty bank manager.

Some people buy NFT's simply to support artists that they love. Blockchain technology can allow the artist to get paid a small percentage of royalties each time their artwork is sold on. How great is that? Imagine creating a physical painting and selling it for $100, and then you see it being sold on for $1,000,000. Surely, the artist deserves some of that, right? That's a much fairer world for everyone.

Some people buy NFT's simply to sell them to others for a profit. That's fine, too, since it helps the artist each time.

This is like super smart futuristic Pokemon cards that your dog can't accientally chew. You can buy, collect, and sell all kinds of art instantly just like the fancy art dealers, and you don't need expensive storage to keep them from going moldy. What's not to love?

So how do you start?

Okay, so NFTs are stored in a special kind of digital wallet. The most popular is called MetaMask and I use this one myself. You can install it as a browser extension or you can download the app to your phone.

This wallet is like a digital bank account but 100x cooler. A bank account that only you can access and that nobody else can close or freeze. It's an account that can store way more than just one currency. You can keep all kinds of cryptocurrencies in there as well as your super funky NFT collection. Hate banks? They're going to become extinct unless they evolve to use this blockchain technology.

Most NFT markets require you to pay in a cryptocurrency called Ethereum (although more options are being added all the time). If you don't currently have any Ethereum in your wallet, Metamask makes it easy to purchase some.

Got some Ethereum ready to go? Head on over to any NFT market such as Rarible and start bidding! Why not try a test purchase here? :)

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