Non-Fungible Tokens (NFTs) are unique, easily verifiable digital assets that can represent items such as GIFs, images, videos, music albums, and more. Anything that exists online can be purchased as an NFT, theoretically.
An NFT is a type of cryptographic token and not interchangeable. This means that each one of these ‘tokens’ is unique, nobody can have the same one as you. In cryptocurrency, you have the ability to pay for products or services, where NFTs you can only trade ‘token for token’. An easy way to understand NFTs is through trading cards, you can trade them with people, but a Babe Ruth baseball card is different from a Nolan Ryan card. In bitcoin and other currencies, that currency is identical throughout the world.
You may be wondering, why the heck do we need these? One reason to buy an NFT is for its emotional value, buying it for the way it makes you feel. The same can be true for a GIF, image, video, or other digital assets. Seventy-Nine (79%) of American’s do not know what an NFT is; while young millenials show the greatest interest in NFTs. OpenSea NFT marketplace is a popular destination for buying and trading NFT’s. Think of it like the Facebook Marketplace for NFT’s. However many other NFT marketplaces exist. Here’s a list of the Top 10 from the Motley Fool website.
The tokens are likely to become globally prevalent, especially with Square acquiring Tidal; a music streaming service. It would allow music fans to potentially acquire unique recordings or songs. Many artists have recorders inside the venues when they play live, but it’s difficult for a fan to get their hands on those recordings. Fans could now purchase a live recording of their favorite band’s concert, having one of the only recordings in the world!