The term NFT keeps popping up in the news and it stands for Nonfungible token…. but what in the world is that?!? We are here to break it down for you.
Nonfungible tokens is a digital ledger that contains data the proves an online asset belongs to the owner. So, if I drew a lovely image in Microsoft paint and wanted to post it online, but was worried no one would know I created the stick-figure masterpiece, I would want to attach a NFT to the file. These data points would prove ownership.
NFT’s gave digital creators a way to sell the ownership rights of their work and they are cashing in. Many original memes, tweets, and digital art is being sold for a lot of money. Twitter CEO Jack Dorsey’s first tweet was sold for $2.9 million. The tweet was “just seeing up my twitter” and is now no longer owned by Jack Dorsey. But that doesn’t mean you can’t still go look at it or just screenshot it and pretend you own it.
Investors in NFT’s view it as digital art that is worth collecting and will hopefully increase in value. At times it seems like just people who have too much money and have no idea how to spend it, but who knows, maybe in five years someone will want to buy Jack Dorsey’s very mundane tweet for 6 million dollars.
The benefits of NFT’s are that you can support digital artists that you love and own a piece of their artwork. The downsides is that NFT’s do require a ton of energy to create and keep (like a warehouse full of computer running hot) which many people are concerned will have a negative impact on our climate.