Non-Fungible Tokens (NFTs)
In this primer, you will be introduced to Non-Fungible tokens and why they are taking the crypto world by storm. Is this modern era art?
What are they?
NFTs or Non-Fungible Tokens are unique digital assets that live on a blockchain. NFTs gain value when content creators, entertainers, and companies use them to accrue value in the crypto economy. When you obtain an NFT, you receive access to that asset and an immutable ownership record of that asset.
They can represent one-of-a-kind items such as pixelated art, NBA highlights (a Lebron James highlight recently sold for $200K), and virtual property (a piece of land in the game Axie Infinity sold for $1.5M). Most recently The Associated Press (AP) is auctioning off an NFT artwork commemorating the first U.S. election recorded on a blockchain. The AP used Ethereum to declare the winner of the U.S. 2020 Presidential Election.
How do they work?
The simplest way to understand NFTs is to think back to Leonardo da Vinci’s Mona Lisa. Only one painting exists in the entire world. Obviously, you could find replicas or you could google and print it for absolutely free, but it does not mean it has the same value as the original.
How do they work?
The simplest way to understand NFTs is to think back to Leonardo da Vinci’s Mona Lisa. Only one painting exists in the entire world. Obviously, you could find replicas or you could google and print it for absolutely free, but it does not mean it has the same value as the original.
Blockchain is the technological innovation that enabled digital scarcity. It spawned a revolution in the way we think about value over the Internet. The same basic blockchain technology that gives Bitcoin its digital scarcity is now making its way into other digital goods. This technology allows you to authenticate, own, and eliminate the possibility of a counterfeit digital painting or a video. If you’d like to read more about the history of the market and view some of the most expensive digital art pieces, please click here for a detailed article, and please click for coverage by New York Times.
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Disclaimers:
This material is presented for general information purposes only, and does not constitute an offer to buy or sell securities. This publication does not constitute general or personal investment advice or take into account the individual financial circumstances or investment objectives, or financial conditions of the individuals who receive it. This does not constitute an offer or solicitation to purchase or sell any securities or Funds, nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
