What are NFT’s and why buy them?
June 19, 2023Fungible or Non-Fungible?
I suppose the easiest way to start is by telling you what NFT stands for, Non-Fungible Token is the answer. I know this doesn’t explain much on its own, but it explains more than you might think.
Let’s break things down as simple as possible.
“Fungible” is something can can be exchanged for something of the same kind. Let’s look at a couple examples. Currency is fungible, If I have a twenty-dollar bill and trade it for a different twenty-dollar bill I still possess a bill worth twenty dollars. Milk is a simple example, if I want a gallon of whole milk I can go anywhere and get a gallon from any store for the price of a gallon of milk.
“Non-Fungible” is the opposite more or less. Non-Fungible basically means unique like a rare Pokémon card or the Mona Lisa. If you have for example ownership of the Mona Lisa there is only one and it can not be replaced or traded for another Mona Lisa because it is Non-Fungible.
Now that we have sorted of the difference between fungible and non-fungible let’s go a bit deeper.
A “token” is an item(s) stored on a blockchain such as Bitcoin or Ethereum, both of these are and other crypto currencies are great examples of a fungible tokens. Non-Fungible Tokens on the other hand are unique and one of a kind. (in most cases)
Why buy NFT’s
The best reason I can come up with is to collect them. NFT’s vary in many ways from photographs, videos, songs, and yes even tweets. When you buy an NFT you own the “original” much like having the Mona Lisa on your wall. People can print copies, frame them, and hang them on their wall but they have a replica so to say.
Because all trades, sales, prices, owners and so on are stored on the blockchain ANYONE can follow the ownership of the NFT from it’s creation all the way to its current owner.
If you visit my NFT Gallery you can see my NFT’s I have made. If you open one in the storefront, for me this is OpenSea, you can view the details and everything you might want to know about the NFT. As I write this all my NFT’s say Created by: TATUBBER and Owned by: Unknown. Since there has never been an “buyer/owner” this information unavailable.
To get to the answer, NFT’s are collectible pieces of art work that are bought, sold and stored on a blockchain. If you buy an NFT it is yours forever until you trade it or sell it to another collector.
Is it worth it?
That answer is both yes and no.
NFT’s have value only when purchased, if you are willing to spend $100 on an NFT it is now worth $100, to you. If you sell the same NFT to someone else it now is worth that selling price, in theory.
For example the artist Mike Winkelmann also known as Beeple created a digital collage and it sold at Christie’s for $69,000,000. Yes that is sixty-nine million dollars.
Everydays: The First 5000 Days ~ Beeple
Do I think this image is worth sixty-nine million? NOPE. But if anyone wants it they will spend more than that to get their hands on this one of a kind non-fungible token.
The sum of all things
To sum it all up, NFT’s are original collectible pieces of digital art stored on a blockchain.
There is a vast amount of NFT’s available and some for as low as a dollar and some, well worth millions. NFT’s can be considered as an investment to some, but without it having a definite value it is like flipping a coin.
With that I will close by saying IF you like an artist and their work and IF you want to own an original piece of their work then go ahead and buy an NFT and enjoy your collectible piece of artwork. If you are looking towards an investment keep in mind EVERY NFT website say that NFT’s are not investments but collectible’s. Like baseball cards….
