What are NFTs?
Twenty-five years after the World Wide Web was invented we have a technology that allows us to own digital assets that we’ve grown accustomed to consuming.
You don’t know it yet but this changes everything!
I still remember in the late nineties when I was trying to explain WWW to people by unwrapping the acronym, “Well, it’s a world wide web of computers,” and all I’d get is a blank stare.
Now, when explaining NFT I say, “Well, it’s a non-fungible-token,” and I still get the blank stare.
However, you really can understand what an NFT is by wrapping your head around the words in the acronym!
Fungible means interchangeable; one bitcoin is interchangeable with any other bitcoin, so a bitcoin is fungible. Same goes for a dollar in your bank account.
Token is a digital asset minted on a blockchain.
An NFT is a unique digital asset whose provenance is recorded on the blockchain.
Digital Assets Are Free So Why Do I Want To Own Them?
If you play a game on your phone, share a meme, or created an idea board on Pinterest™ then you know ALL about using digital assets, usually owned by other people!
Photography, illustrations, video clips, or even digitized traditional art are all digital assets.
The truth is, you don’t have to own something to enjoy it. Whether it’s a boat on the lake or a digital asset on the blockchain, ownership can cost money but looking is free!
I’ve enjoyed many Van Gogh paintings in my life and even bought a print of one from the museum where the original is hung.
I can buy books that feature copies of Van Gogh’s work or the letters he wrote to his brother Theo or I can look at a picture of any painting he ever made on the internet.
Even though all of this content is readily available, collectors still pay hundreds of millions to own an original by Van Gogh!
Don’t they know they can see it for virtually free at a museum? Yes, but they also know that owning something can offer advantages, especially if the item in question is high in demand and limited in supply.
This is a screenshot of an NFT on the WAX™ blockchain with ownership information.
The Provenance of an NFT that shows it traveled back to the artist.
Tracing a chain of ownership is called provenance, and provenance can make all the difference in the world when it comes to value!
Ownership Comes with Exclusive Perks
Content is king and it will continue to rule our culture and dominate the economy for the foreseeable future.
Owning digital content isn’t new, we’ve been able to download premium digital content for eons from our favorite artists, and games and bonus content on a DVD.
This digital content was ours to use for personal enjoyment, but it wasn’t uniquely ours. Identifying a copy from the original when it came to digital content was all but impossible. So documenting ownership was out of the question, NFT technology changes that.
Ownership is just the beginning.
If you’ve ever used a digital ticket to get into a concert then you know all about using a digital asset to open up an experience.
NFT assets can unlock experiences!
Owning content is bigger than saving a screen-shot on your phone or downloading a video onto your computer, because since everyone can do the same thing that action has no value.
Blockchain technology can prove both ownership & provenance in a verifiable and permanent way!
The reason the digital assets you borrow have no value is because they have no provenance, like any art or collectible once you show provenance, trace ownership back to the artist, then you can show authenticity.
In this world, authenticity has value! In the art world provenance can absolutely be priceless! The blockchain makes this possible!
I own this physical print
It isn’t a limited edition, so it can be replaced by any identical print from the museum. This is a great example of a fungible piece of art, often decorative and no provenance to Van Gogh, the original artist. But I still love it and paid for the print and to have it framed.
The technology of a non-fungible-token (NFT) allows verifiable ownership of digital assets which unlocks potential uses for:
- Artists & Creators
- Collectors of Pop Culture
- Gaming & Gamers
- Passive Income!