written by DWKC Digital Director Lori Whetter
This is an acronym I’m sure we’ve all heard a 1,000 times and if you’re anything like me, just pretend you fully understand what it means. Well, today we are going to break it down.
What is an NFT?
Non-fungible Tokens (NFT) have continued to grow in popularity because of their one-of-a-kind nature. “Non-fungible” means that it’s unique and cannot be replaced, like a one-of-a-kind baseball trading card or that clay coffee mug your daughter made for you in 5th grade art class, or concert tickets. Even if the tickets are the same price, they aren’t directly exchangeable. Each ticket represents a specific seat and date. No other ticket will have those same characteristics.
On the other hand, fungible items can be exchanged because their value defines them rather than their unique properties. The dollar bill is an example of this – each dollar bill is worth exactly one dollar.
How are NFTs being used?
NFTs are increasing the value of digital assets by allowing creators, artists, musicians, and influencers to sell work that otherwise might not find a market. For example, an artist publishing work on a social network makes it easier for the platform to make money by selling advertisements to the artist's followers. The more followers the artist has, the greater the monetary benefit to the platform, but the artist simply gets greater exposure. The NFTs enable a new creator economy where creators own their content directly instead of entrusting it to the platforms that publicly distribute it.
Any digital asset can be created as an NFT on an NFT marketplace, such as OpenSea, Mintable, Rarible. Things like art, GIFs, videos and sports highlights, collectibles, designer sneakers and video game skins are all examples of NFTs that have been created. Twitter co-founder Jack Dorsey sold his first tweet ad an NFT for more than $2.9 million. A LeBron James highlight NFT was purchased for more the $200,000.
How do you buy an NFT?
To purchase NFTs, you’ll first need to set up a digital wallet that offers NFT and cryptocurrency storage. You’ll then need to purchase some cryptocurrency, like Either, using a credit card on platforms like Coinbase, Kraken, eToro or even PayPal. From there, you will be able to move it from the exchange to your digital wallet of choice. Be mindful of fees as you research your options. Most exchanges charge a percentage of your transaction when you purchase crypto.
What do you own?
Purchasing an NFT is essentially owning the property rights to the digital asset. The owner has a certificate of authenticity on the item purchased, much like a deed to your house. Ownership is managed through the uniqueID and metadata that cannot be replicated on any other token.
The ownership tracking is another valuable part of NFTs. Anyone can track any NFT to see who created it, when it’s sold, and subsequently resold. They can also be created in a way that allows the original artist to earn a percentage of all subsequent sales.
What do you do with it after you buy it?
Well, some people display it on digital frames or large monitors, other people build virtual galleries and museums. For some, they are simply attracted to the act of buying and selling.
So whether you’re a collector, artist, want to dip your toe into something new, or just curious, I hope this article helped provide some clarity on the subject.