Jacob Osborn

What is an NFT? A Guide to Non-Fungible Tokens | Man of Many

The letters NFT stand for “non-fungible token” to infer a unique and one-of-a-kind entity. In the same manner that no two Picasso paintings are exactly the same, nor are any two NFTs. Compare that to say an American dollar bill or a Bitcoin, both of which are “fungible,” meaning you can swap one out for another of its exact kind (technically speaking, both dollar bills and Bitcoins have unique serial numbers or codes, but you get the point). If you own an NFT, you are the one and true owner of that one and true particular token.

What is an NFT?

Peer beyond the proverbial curtain and you’ll notice that the majority (though not all) of NFTs are supported by the Ethereum blockchain. Just a reminder: a blockchain is essentially a decentralised and incorruptible digital ledger that records all transactions so as to confirm exchanges and protect ownership of a cryptocurrency or an NFT, amongst other things. Bitcoin and Ethereum (to name just two out of the mind-numbing legion of cryptos) are both supported by their respective blockchains so as to secure ownership and enable safe transactions.

How Do NFTs Work?

Both supported by blockchain technology, NFTs and crypto are otherwise as starkly different as say a rare painting and cold hard cash. Remember, NFTs are unique commodities whereas cryptocurrency is more analogous to something like stocks, precious metals, or…well…currency. Trading one Bitcoin for another is as pointless as swapping out equal amounts of gold, equal shares in the same company, or two $5 bills (on the presumption that one of those bills isn’t rare or collectible). By contrast, to trade two NFTs is to trade one completely unique entity for another. Even if both NFTs are similarly valued during the exchange, one could subsequently skyrocket in value whilst the other could plunge.

How Do NFTs and Crypto Differ?

When you purchase an NFT—whether it be a video, image, X-ray, meme, song, NFT artwork, digital sports card, or Tweet—you are the single owner of that particular property. Where you take your property or how you use it can vary. For instance, you can buy an ultra-thin, ultra-HD screen and display your rotating collection of NFTs on a designated wall. Or you can project the NFT as an augmented reality hologram (should you have the means). Or you can put it as the home screen background on your smartphone. Or you can simply hold onto it (or should we say hodl) and then sell when the time is right.

What Are NFTs Used For?

While some brands have jumped on the NFT bandwagon just to be involved, others are using NFTs as a way to innovate and get a foothold in the ever-growing crypto industry. In fact, in recent times, some of the biggest platforms and brands in the world are getting involed.

The Future of NFTs

Needless to say, NFTs have elicited a mixed reaction, particularly from the traditional art world. While some artists have questioned the validity and creativity behind the medium, while others are embracing the new digital gallery.

The Art World’s Reaction

You can currently purchase NFTs through a number of platforms, many of which specialise in some sort of niche like trading cards, artwork, memes, and so on. Others are more general in scope, straddling a full range of categories. Traditional auction houses, in-app purchase games, and art galleries are also bringing non-fungible tokens into their wheelhouse.

How to Buy NFTs

We’re here to answer a question—what is an NFT?—meaning we’re not here to offer you investment advice (and for somewhat obvious reasons). With that disclaimer out of the way, we would add that there’s no harm in supporting NFT art for the same reasons that you’d support traditional art: because it nurtures creativity and growth. In this scenario, you wouldn’t buy NFT art as an investment, but because you actually like the image, video, song, meme, or whatever else and want to own it for yourself.

Should You Buy NFTs?

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