What is an NFT?
An NFT is a Non-Fungible-Token. It’s a digital asset with a unique identity. Non-fungible means it can’t really be exchanged for another asset since its value can’t be clearly defined.
For example, if you have an original work from a long-gone famous painter, the painting may be priceless. It may be magnificent art done by a well-known artist, but more importantly, it’s the only one on the planet. There could be many copies that may look very, very much like the original. Copies will never command the same price as the original.
So, the ability to identify if it is an original is critical.
What are the features of an NFT?
NFT characteristics:
- No two NFTs can be the same. There may be copies, potentially millions, but while these are similar the the original, itself is unique. And the owner of the original is known to have the original copy.
- A blockchain will define the authenticity of the original and verify each subsequent purchase of that NFT. The blockchain will confirm the owner of the NFT at any point in time.
- Again, the blockchain implementation will define ownership of the NFT. The owner isn’t ‘licensing’ a copy of the original. They explicitly own the original.
What makes an NFT valuable?
The value of an NFT is determined by the market, and that will fluctuate based on interest in it and condition of the market itself. Speculation plays a significant role, and like cryptocurrency markets, volatility is likely.
Value might be enhanced if the NFT has a story or has a recognized creator. Maybe it’s a picture of a football thrown by a famous quarterback and created by that quarterback.
Why?
It’s a good question. You can get started creating and purchasing NFT by using one of several Marketplaces. Some might say it’s a gamble, but then again, an original 1914 Baltimore News #7 Babe Ruth baseball card probably came in a pack of gum in 1914 but was sold in 2013 for $450,300.
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