WTF is a NFT and Why Are They Worth So Much Money?

What began as an internet hobby among subsets of tech and finance nerds has catapulted to the forefront of the crypto economy.

Which leads us to ask: What the f*** is an NFT?

NFT stands for “Non-fungible Token.” Non-fungible, meaning you can’t exchange it for another thing of equal value. A non-fungible token is a unique unit of cryptocurrency. It’s a digital certificate for intellectual property and is stored on the blockchain. So the owner of an NFT owns an asset, whatever that may be, and the proof of ownership of that asset, which is embedded in the blockchain code.

The NFT’s are thought to have originated with the digital GIF for Nyan Cat (pictured above). That was ten years ago, and its creator Chris Torres decided to dabble in the NFT world to celebrate. Torres put a signed, remastered version of the popular GIF up for auction on Foundation, a crypto art platform. It went for 300 Ethereum (a type of cryptocurrency), which is about $560,000 to those stuck in yesteryear’s currency model. But the first use of the term “NFT” was in 2017 with the game CryptoKitties, where people buy and sell digital cats with Ethereum.

The artist Grimes, aka Misses Elon Musk, recently sold several NFT’s for close to $6 million. An NFT of LeBron James making a historic dunk for the Lakers sold for more than $200,000. The band Kings of Leon is releasing its new album in the form of an NFT. And last week, Twitter CEO Jack Dorsey listed his first-ever tweet as an NFT.

If you are still confused about the nature of NFT’s, it’s okay, I am too – even though I’m writing an article trying to explain it to you. I have plenty of questions still lumbering in my non-techy head. Are you basically buying what amounts to a digital trophy? A digital collector’s item? Maybe, but you are also purchasing a kind of bar code, almost a certificate of authenticity that serves as proof that a certain version of something is uniquely yours.

Sp how do you buy or sell an NFT?

First, you have to buy a cryptocurrency, like Ethereum. That’s a process in and of itself. But once you do, you can go to an NFT marketplace. Some of the popular ones include KnownOrigin, Rarible and OpenSea. There, you can bid on an NFT and wait for the auction to end.

If you’re still confused, check out this digital artist’s explanation:

Now I have to figure out how to make my own NFT’s. I’ll have a follow up article on that coming soon…