Everything you need to know about NFTs

You’ve probably heard of NFTs at some point. It’s making headlines left and right, and if you follow financial publications, you’re probably well-acquainted. It is the red-hot investment craze stealing the nation’s attention.

But what is it really? Well, like anything related to digital cash, it’s a bit complicated. Speaking of which, tap or click here for a crash course in cryptocurrency.

No worries, though – we’re here to clear the fog. Today we’re diving into the strange world of NFTs: what they are, how you can buy them, why they became so popular and more.

First of all, what does this mean?
The acronym NFT is short for “Fungible Token”. In case you have no clue what fungable means, it refers to interchangeable items. Basically, it means changeable – so if something is irreplaceable, it is immutable. So if you buy a non-fungible token, you are buying something that is one of a kind. Nothing can replace it.

with us so far? Here’s an example: One of Kim’s favorite snacks. Kim loves our sponsor, Human Superbeats Heart Chews, and always has a bag of them on her desk. During the video meeting, if someone mentions the gummies, Kim’s face will light up as she pulls out her bag to show off the pomegranate gummies.

When Kim wants to buy a bag, she goes to the Internet and gets a bag for $35. But the bag she buys isn’t unique—when she buys it, she doesn’t care what specific sticky bag Human ships with in her house. All he needs is a bag.

If some Superbeats-loving thief was so hungry for the sweet pomegranate flavor they broke into her office and snatched her bag, Kim would have wanted a replacement. Instead of sniffing at the loss of that specific bag, she’ll be happy with her new bag.

That’s because the bags for SuperBeets Heart Chews are all the same. They are replaceable. Or, in other words, they are fungible.

As you can imagine, irreplaceable goods are far more valuable than alternative goods.

Compare Kim’s favorite chews to a treasured item kept in her house: a BBC mic from World War II. Her husband Barry bought it as a gift four years ago. After watching “The King’s Speech”, Kim was fascinated by the unique mic used in the film.

She told Barry, “That would be great to be Mike!” When Barry found it on eBay, he knew she would love it. Although the BBC’s Mike She is not the same as the Colin Firth used in the film, Kim’s model has a unique history of its own.

“It was used at Buckingham Palace at some point,” Kim said. “I often walk into the living room near it, lean in and say, ‘Hello, it’s London calling.’ In a British accent, of course!”

Since Kim’s BBC mic has its own rich history, it is irreplaceable. Sure, she could find a similar mic online – but she wouldn’t have the same spirit. This one is special because it was a gift from her husband, and she associates it with a movie they enjoyed. In short, it is irreplaceable.

But how does all this translate into the digital space?
That’s why we have given you an example of a fungible item. Now let’s look at some irreplaceable items. These are irreplaceable objects – think of the Mona Lisa, a rare and special painting you can only see in the Louvre.

As it turns out, you can have a digital version of the Mona Lisa. It’s called the Nyan Cat, and it’s a timeless piece of Internet history. A cat with a poplart body flies into the sky, emitting a dazzling rainbow.

Ten years ago, users liked Nyan Cat very much. It was one of the web’s biggest memes, and is still considered an iconic part of 2010 Internet history.

In February, Chris Torres, the creator of Nyan Cat, placed a unique copy of Nyan Cat for sale on an NFT website called Foundation. A mysterious buyer spent $826,419 to buy the rights to this digital GIF.

This is where confusion can arise. You may be thinking, “Why spend so much money for a Nyan Cat? I can just right-click on it and save it to my computer!” Sure, but you won’t own it. When Chris Torres sold it as NFT, he was basically selling ownership of this famous GIF.

still confused? let’s enter the weeds we might as well be in the woods
So, we got the core philosophy out of the way. You understand that non-fungible tokens are extremely valuable. You also understand how they differ from exchangeable tokens.

But what if you don’t know what “token” means? Well, it all comes down to the blockchain, an online peer-to-peer environment where you can transfer digital currency.

Basically, each NFT is a unit of data stored on a blockchain (which is just a public digital ledger of business transactions on the web). Blockchain authenticates unique digital files. If you already understand how cryptocurrencies work, you are halfway there.

No comments

Powered by Blogger.