NFTs: What Are They?

NFT´s are a new phenomenon that have as many people confused as intrigued.

NFT´s, or Non Fungible Tokens, are a new way to spend money, or potentially earn a lot of money, that’s surpassed cryptocurrency in hype and popularity. They are completely digital. NFT´s give you a blockchain created certificate to authenticate an asset that you have digitally, like artwork, music, etc. NFT´s have made a digital market of $250 million sales in 2020. This new wave has cause people to put up their own artwork, music, and even tweets as NFT´s for the chance to make money.

So what exactly are NFT´s?

A NFT is a new, unique digitally recorded token, most using the Ethereum blockchain to record transactions. NFT´s are not a cryptocurrency like Bitcoin, because they are replaceable and able to be exchanged for other Bitcoin or cash. NFT´s are recorded digitally, the same as cryptocurrency, so they is a list of who owns each one.

The thing that makes NFT´s different than anything else that has come out so far is the digital aspect. This can be a video, image, tweet, piece of art, or music that is uploaded and sol onto a digital marketplace. This technology was originally created in 2015, but became popular in February.

If you buy the NFT, it doesn’t mean that you actually own the original creation. For example, most people know the  Nyan Cat meme.  It sold an NTF for $590,000. The person who bought the NFT doesn’t actually own the meme. The person who bought the token has a record and a code showing that you own the token. Other people can download and use the meme, but they actually own it and can sell it and make money.

What are the downsides of NFT´s?

One downside is the hundreds of dollars of fees that go into creating a NTF. There is also an environmental downside. Computers use a lot of energy, and since all of this is digital all of this NFT stuff uses a lot of energy.

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