LANSING, Mich. (WLNS) – Chances are you’ve probably heard the initialism NFT recently, most likely online. But just what are NFTs? And how do they work?
NFT stands for “non-fungible token.”
NFTs are unique, individual files that exist on a blockchain, similar to cryptocurrencies like Bitcoin.
A major difference between cryptocurrencies and NFTs is that each NFT is unique, whereas each Bitcoin is the same and interchangeable.
This means no two NFTs are the same.
This allows NFTs to be used for more than just trading.
NFTs can take many forms, such as audio files, video files, images or any combination, which has drawn many artists to ditch the canvas and turn to the computer screen.
Popular auction house Christie’s started selling NFTs, with digital art selling for over $3 million.
One of the most famous NFTs sold is the first Tweet ever sent.
Twitter CEO Jack Dorsey sold the 2006 post on the site Valuables, an NFT-selling site where prospective buyers can purchase autographed Tweets.
Dorsey’s sold for $2.9 million.
NFTs are also a method of investment.
Mintable.app, an NFT selling company said in a reddit post:
” These NFTs/items are collectible. You can hold onto them, and their value will only go up in price since there are little ways to dilute the collection. Buying them to resell them can earn you thousands of dollars. There are plenty of people who do it everyday and earn a living from it….
You can always resell your NFT. You SHOULD resell your NFT and trade it. You can make some serious cash trading NFTs. Some NFTs have gone for 20,000 USD + when the original buyer only bought it for a few thousand dollars. Making them over 15,000 USD in a short time in ONE trade!”
Critics of NFTs point out how easy it is to copy or counterfeit the art of an NFT.
For example, if a certain NFT is only a single digital painting, all a prospective pirate has to do is screenshot the preview. Now, they have the art without paying for it.
However, proponents of NFTs say the real value is in the blockchain attached to the art, and not the art itself.