If you follow the tech world or finance world at all...
You’ve most likely been hearing a lot lately about NFT. If you were anything like me you have no clue what that is. Allow me to demystify it for you. NFT stands for Non-Fungible-Token; what that basically means is that it is unique and not interchangeable.
A close example would be the difference with something like Bitcoin, or any stock can be traded or exchanged and it doesn’t change. They represent real world money at any given time. An NFT is different because it imbues ownership. This would be similar to an original piece of art like a painting. You could of course trade/sell the NFT/”painting” but once you do, you lose ownership.
Here's an example...
OK, now for a more concrete “real world” example. For anyone who has played video games or has kids who play video games, you are probably familiar with in game purchases. These would be things like buying a costume or weapons for your character. Or different “skins”. These are all NFTs. Where currently, they only exist within that specific game, NFTs will now exist on the Blockchain and when you purchase one, it will come with a certificate showing that you are the sole owner and that it is the original.
So if you buy an NFT, like digital piece of art or an NBA dunk highlight (NFTs can be any piece of art that is digitally created by somebody or even a GIF or image, really it is anything digital), the unique bit of information about that artwork—including its smart contract and origin—is stored on the Blockchain. It proves you own it. You can also think of it as a chain or records stored in the forms of blocks that are connected and managed by no single authority.
The Blockchain is a decentralized data structure that holds transactional records while ensuring security, transparency and decentralization. Picture it like this: Imagine a ledger existing online that keeps a publicly accessible record of who owns what.
I asked myself why someone would pay for a digital image that you can simply copy and paste hundreds of times on your computer and print out any copy you want and the copy is identical to the “original”???? Well, why do people pay millions for an original Rembrandt, or Monet, or Van Gogh? I can buy a print of it online for $20 right? Well, if someone is willing to pay a lot of money to say they have the Original artwork, even though there are millions of prints of it, then people will pay for original “digital” artwork, knowing there are millions of copies out there.
In my opinion, it’s worth the 10-20 hours it will take to learn about NFT on YouTube because there will be great investment opportunities coming (THIS IS NOT INVESTMENT ADVICE) I had somebody tell me to buy Bitcoin when it was only a few dollars and nobody knew what it was or understood it. I missed that boat, don’t miss this one.
Remember, as with anything, everything is worth what people are willing to pay for it.
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