Non fungible tokens
An NFT is a digital collectible asset such as a piece of art or a trading card (or something even more at home on the internet such as a meme or a tweet) that provides a record of its ownership and authenticity and thus allows it to be sold and collected like a Picasso at Christie’s. Because they model the scarcity and uniqueness of traditional art works, they’re also quickly becoming an investment vehicle.
This tweet-turned-NFTt, the Twitter founder’s first entry on his social media network, recently sold for over $2 million.
THIS TWEET-TURNED-NFT, THE TWITTER FOUNDER’S FIRST ENTRY ON HIS SOCIAL MEDIA NETWORK, RECENTLY SOLD FOR OVER $2 MILLION.
HOW DOES THAT WORK?
NFT stands for non-fungible token. Non-fungible means non-interchangeable. Unlike the way one US dollar is exchangeable for another US dollar or one bitcoin is the same as another bitcoin, each digital work and its corresponding token that holds the record of its value is unique. Because NFTs and the marketplaces they trade on are linked to the blockchain (the digital database that supports cryptocurrencies with a public ledger), these files now have a unique digital identifier that cannot be copied, substituted, or subdivided, and that is used to certify authenticity and ownership.
When you buy an NFT, you’re getting a digital file as well as a certificate of authenticity. Though there might be other copies of the file out there on the internet, the NFT system provides proof that you own the one that matters. Can you still download a copy of Beeple’s record-setting “Everydays - The First 5000 Days”? Sure, just right-click it like any other digital image. But can you claim to own it? Only if you were the $69.3 million winning bidder with the corresponding entry in the blockchain’s digital ledger.
