The first is the first:
What are NFTs (non-fungible tokens)?
If you asked my uncle, he’d laugh and say, “What, those pictures on the internet where all the millennials are throwing their money away? You might as well set the money on fire!”
This was a real conversation that happened over Christmas this year. All I could do was stand there and smile.
He has no idea that:
- NFTs are much more than images.
- They have an infinite amount of utility.
- They are the future of digital ownership and authenticity.
- All digital assets will eventually exist as NFTs.
(And just because Paris Hilton, Eminem, and Steve Aoki own Bored Apes doesn’t mean NFTs are just a fad for rich people.)
Working backwards:
- A token
- That’s not fungible (def: tradeable with an identical item)
In other words, unique tokens that live on a blockchain.
The first part of that statement is quite important. NFTs are unique, which means that one is not the same as the other in the way that dollars or bitcoins are. That’s what non-expendable means.
Think of an NFT as a virtual trading card, one that also exists as an asset in crypto.
The second part of that statement is equally important. Living on a blockchain is living on a digital ledger verified by all computers that cannot be disputed or changed. It is a single, decentralized source of truth.
NFTs are inextricably linked to the blockchain, which means they are built on a future of trust and decentralization.
They are very young – we are pioneering the future usefulness of NFTs as we speak.
They represent ownership of digital assets and have fantastic metadata.
NFTs are more than just JPEG files of pixelated monkeys and punks.
(By the way, we call such projects Avatars or PFPs (Profile Picture). They are often used as profile pictures by the owners of an image, a sort of status symbol, or a proud badge of community membership.)
If you’re involved in the NFT space on social media, you’ve probably seen a lot of these. He’s kind of a character on a square and he sells for thousands of dollars, and you probably want to know why.
The answer is simple: people love to collect. Think of it like baseball cards, Pokémon, or Beanie Babies. Some are rarer than others. They are an addictive rabbit hole for those who enjoy gaming and/or collect anything.
You’re likely in the middle of a confederate storm every day consisting of one person after another trying to convince you that their project is awesome and why you should spend $900 on their badly drawn bird. To be fair, many of these projects have deep roots in storytelling and are great ways to build community (NFTs lend themselves well to that capacity, more on that later).
Unfortunately, we are not currently encouraging long-term stay in space. 90% of projects will not survive, according to digital transformation expert Swan Sit. Call me crazy, but I have a hunch that most of these projects offer no external collector’s value (with the exception of bragging rights in select cases).
So why are PFP projects so popular in the NFT space? Well, for one, they are status symbols in the crypto community. A Bored Ape is awesome to own, due to its luxury price and affiliations. Second, many of these projects (at least the ones that last) form actual communities, which have a discord attached to them, exclusive parties that only community members (holders of that NFT) can attend, or in some cases a game. (like Divine Dragons, which will be released very soon!).
NFTs are digital property.
Social media and NFTs are inextricably linked. Right now, social platforms own all your content. Apart from a website, which is a digital property owned by brands. There is nothing that easily helps give content creators indisputable credibility for their work. It’s the wild west right now. Let’s be civil.
Instead of Big Tech owning our content and data (shout out to all the creators who have been banned from TikTok), creators have complete autonomy over their content.
You can think of NFTs as certificates of ownership. If the NFT exists in your wallet, you are the undisputed owner of said NFT. You can do whatever you want with it, no one will take it from you or tell you it’s not yours.
Individual wallets are public and accessible to anyone with internet access. Due to this complete transparency, the authenticity of an NFT is always verifiable.
Rachel Wolchin is an author whose work has always been shared on Tumblr without credit. NFTs are a way to collect all those external shares and link them to Rachel. If every piece of content Rachel posted was also minted on the blockchain, she would never have to worry about losing credit again. NFTs allow us to truly own our content.
“I became famous on Tumblr and Pinterest, and a lot of the things I said were being circulated and people were sharing them as if they were their own thoughts. With NFTs… I don’t have to worry if someone shares something on the blockchain – they say it’s mine when it’s mine.” —Rachel Wolchin @ NFT.NYC
NFTs are the gateway to Web3.
There are three eras in the history of the Internet (think of them as “generations”).
In other words, Web 1 was “read only”, Web 2 is “read and create”, Web 3 is “read, create and own”.
The most important part of Web3 is the decentralization of the Internet. Torrents, crypto, IPFS, and new forms of DNS like ENS and Unstoppable Domains all exist under the web3 umbrella.
I define web3 as the web without trust: a world that allows us to make independent financial decisions without having to “take anyone’s word for it.” Everything is provable. I don’t have to trust a brand to send my money for me. I don’t have to take a vendor’s word for it that that file is what it says it is. I don’t have to rely on big tech to keep from losing, using, or selling my data. Everything is distributed, code-based, and free of intermediaries.
As DCinvestor, a Twitter-famous NFT collector and avid DeFi supporter, once said:
“The value of Ethereum is not that it is a global cloud computing…rather it is a general-purpose shared source of truth that everyone can agree on, while remaining censorship-resistant and tamper-free without anyone else. “control”. ”
I am a big proponent of using NFTs and blockchain technology to improve authorship and opportunities for both artists and brands.
This is not a trend. This is a real solution to the problems that the internet economy has been facing for a long time, and you won’t want to miss it!
So now that you know what NFTs (unique cryptographic tokens representing a digital asset) are, stay tuned for my next article on why you should care and what you can do with them.
