WTF Is an NFT?
graphic by anastasia powell
NFTs are the latest innovation in the world of cryptocurrency, and if the trend keeps up, it has the potential to revolutionize the way we view and think about digital art and the concepts of art itself.
But like… what are they, though?
NFTs (or Non-Fungible Tokens, if you’re a nerd) are yet another new part of the ever-growing and impossibly confusing world of cryptocurrency, and more and more people are getting in on it every day.
What is an NFT?
While traditional physical pieces of art like oil painting and marble sculptures are one of a kind and cannot easily be duplicated, digital art can be downloaded and duplicated tens of millions of times over. NFTs, essentially, aims to expand the kind of exclusivity that physical art has to the world of digital art. Essentially, when you buy an NFT, you get a token that indicates that you are the sole owner of the true copy of whatever digital art you decided to purchase. People can still copy it as much as they want, but whoever owns the token owns the “original” piece of art.
What does non-fungible mean?
In economics, a “fungible” item means something that is interchangeable or not unique - take cash, for example. If you and your friend have two ten-dollar bills, you can trade your ten-dollar bill for their ten-dollar bill and you’ll neither gain nor lose any value. NFTs, however, are different, in that they’re non-fungible. NFTs are similar to traditional art in the sense that each one is unique. If you trade with another person you’ll end up with something completely different. If I trade my sculpture for someone’s painting, for example, I’ll end up with something unique.
Wait, so what stops people from counterfeiting tokens?
Okay, so this is where the weird cryptocurrency stuff comes into play. Ownership of NFTs is registered on what’s called a blockchain, which is a sort of a digital ledger. What makes blockchain so special is that the contents of the ledger are distributed across thousands upon thousands of computers, essentially making it impossible to hack or change it. If the ledger was stored on one computer, someone could hack it - but the fact that it’s stored on a larger network makes it impossible to change.
Why should I care?
Remember Nyan Cat? The rainbow-riding dancing Pop Tart cat that was hot shit on the internet like, ten years ago? Well, the original creator turned the video into an NFT and sold it for… over $600,000 dollars. While the video still exists on the internet and everyone can still download it, the possibility of owning the “original” Nyan Cat drives people to pay ridiculous amounts of money for it. In a way, it’s the same reasoning behind buying a traditional million-dollar painting. While anyone on the internet can just download a copy of Starry Night, the allure of owning the original Van Gogh version makes it so expensive.
Is this going to be a thing now?
Honestly? No one really knows. The pandemic is boring everyone out of their minds and people are getting stimulus money to burn, which could possibly explain why people are paying ridiculous sums of money for supposedly random things all of a sudden. Maybe once the pandemic is over, NFTs will fade out of the public zeitgeist and become worthless.
However, we’re cautiously optimistic about the future of NFTs. NFTs could create a new digital marketplace for art, which makes it easier for artists to sell their works online in an age where copying and counterfeiting are so easy. NFTs could potentially revolutionize the way we see and treat digital art, which makes the possibility of them taking off so exciting. Perhaps they’ll become similar to rare trading cards, where they may not have physical value but the exclusivity and rarity create a market full of avid collectors and buyers.
NFTs are as exciting as they are confusing. Even though you understand what they are, it’s still difficult to understand why someone would buy a .gif for the price of a house. If you’re a digital artist, or if you recently got an Easter bonus, NFTs could be a fun investment. Just don’t spend half a million dollars out the gate.