What are NTFs?
Tokenized
Non-fungible
The tricky part
Exclusivity
Nyan cat to the moon!
Crypto Art means business
Selling encyclopedias, no longer door-to-door
The Invisible Hand Behind the NFTs
From invaluable to worthless
The new Tulip Mania
A Ponzi scheme?
Just like bitcoin
Damien Hirst jumps in
'Melania's Vision'
The New York Times experiment
'“new digital value system'
Ownership
Fluid reality
NFTs explained: a quick guide
(1/19)
What are NTFs?

NFTs (Non-Fungible Tokens) are one of the latest trends in the world of technology and finances. Everyone seems to be talking about them but, as one comedian pointed out, they seem to mix what you don't know about money with what you don't know about tech. Here's a quick guide, so you that you don't left out of the loop.

NFTs explained: a quick guide
(2/19)
Tokenized

The 'Token' part of NFTs means that they are an asset that can be bought, sold, or traded. It can be a digital file, such as an image, an audio recording, a text document, etc. In this instance, virtually anything can be 'tokenized', however, here comes the tricky part…

NFTs explained: a quick guide
(3/19)
Non-fungible

These assets or tokens are non-fungible, thanks to blockchain technology. In layman's terms, the technology behind cryptocurrency ensures that a digital file has a code that makes it unique.

NFTs explained: a quick guide
(4/19)
The tricky part

This means that, unlike a photo or text file that you copy and share through e-mail or WhatsApp, you can't duplicate NFTs. Also, unlike cryptocurrencies, you can't swap an NFT for another NFT. They are one-of-a-kind and therefore have a unique value.

NFTs explained: a quick guide
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Exclusivity

Since NFTs are unique and exclusive, they can be a useful tool for digital artists to preserve the exclusivity of their work. However, it also makes way for speculation.

NFTs explained: a quick guide
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Nyan cat to the moon!

After all, anything exclusive has a unique value attached to it that depends on how much are people willing to pay for it. The image of this GIF, called Nyan Cat, was sold in February 2021 for over 580,000 US dollars. Business Insider called it an example of Crypto Art.

NFTs explained: a quick guide
(7/19)
Crypto Art means business

Some digital creators have started to focus on exclusively working Crypto Art. The NFT of a digital collage by US artist Beeple was sold at Christie's for over 69 million US dollars in March 2021.

Pictured: Works by Beeple exhibited at a crypto art museum in Beijing.

NFTs explained: a quick guide
(8/19)
Selling encyclopedias, no longer door-to-door

As explained before, not all NFTs have to be “art”. In December 2021, Christie's auctioned the first online version of Wikipedia for 750,000 US dollars. The argument behind the sale was that the owner was acquiring a piece of internet history.

NFTs explained: a quick guide
(9/19)
The Invisible Hand Behind the NFTs

This begs the question: are all NFTs valuable? Well, it depends. Going back to the art analogy, a painting, or a sculpture only has a worth fixed by the market. Graffiti art by Banksy has sold for millions.

NFTs explained: a quick guide
(10/19)
From invaluable to worthless

The same thing happens with NFTs. For example, Lindsay Lohan has recently launched a series of NFTs for sale. If people are willing to pay something, they might be valuable. If not, they might be deader than disco.

NFTs explained: a quick guide
(11/19)
The new Tulip Mania

However, some analysts believe that NFTs (and cryptocurrencies) are nothing but a speculative bubble that could burst at any minute. Instead of being a novel way to trade art, they are no different from the Tulip Mania that hit the Dutch economy in the 17th century.

Image: Catia Climovich / Unsplash

NFTs explained: a quick guide
(12/19)
A Ponzi scheme?

"There’s virtually nothing humans can’t turn into a market". Writes Australian economist John Hawkins in The Conversation. In his piece, he argues that NFTs are essentially a Ponzi scheme where the only way to profit is finding a "bigger fool" to buy your assets.

NFTs explained: a quick guide
(13/19)
Just like bitcoin

“There are speculative bubbles in things with absolutely no fundamental value. NFTs have joined Bitcoin as examples of tokens with no intrinsic worth, which speculators just buy in the hope the price will keep rising,” writes Hawkins.

NFTs explained: a quick guide
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Damien Hirst jumps in

Regardless of whether NFTs are a solid investment, a Ponzi scheme, or an economic bubble, what is true is that many are jumping on the bandwagon. Eccentric artist Damien Hirst launched a collection of 10,000 NFTs with an estimated value of 50 million US dollars.

NFTs explained: a quick guide
(15/19)
'Melania's Vision'

From YouTube celebrities to TIME magazine are getting into the NFT business. Even Former US First Lady Melania Trump got around selling a painting of her eyes, according to CNN. However, the value had already sunk just after the auction.

NFTs explained: a quick guide
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The New York Times experiment

Kevin Roose, a columnist for The New York Times, did an  experiment. In March 2021, he decided to auction one of his columns in NFT form. It sold for 560,000 US dollars.

NFTs explained: a quick guide
(17/19)
'“new digital value system'

After the auction, Roose wrote an article titled “Why Did Someone Pay $560,000 for a Picture of My Column?” where he included opinions on NFTs. Artist Rulton Fyder argued that NFTs created a “new digital value system”.

NFTs explained: a quick guide
(18/19)
Ownership

“People from my generation who grow up in the 1970s will love to collect first edition books, novels such as Ulysses by James Joyce,” wrote the artist to The New York Times. “What crypto and NFT opened up is the ownership of the rights to say one owns such a thing, whether tangible or intangible.”

NFTs explained: a quick guide
(19/19)
Fluid reality

What is true is that tech industry moguls, like Mark Zuckerberg and his Metaverse, are betting on NFTs, just like they are doing with cryptocurrencies. As our reality turns more virtual, concepts such as assets or ownership become more fluid. Time will tell if this booms or busts.

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