NFTs are so hot right now. What the heck are they?

NFTs - Non-Fungible Tokens

Do you know collectibles, like baseball cards, stamps, and action figures? NFTs today, as most people think of them, are essentially a digital form of collectibles. There are only about 2,500 Topps baseball cards of Mickey Mantle from 1952 (one recently sold for $5.2 million). And there is only one series of NFT images backed by Justin Bieber that Garrett bought (image below). The value of either collectible is only whatever the next buyer is willing to pay. NFTs are super new and have been mainstream for only 2 years. Today, NFTs mainly apply to digital collectibles, which can take the form of a digital picture, .gif, video, or any digital file. Tomorrow, a great use of NFTs could be music copyrights, video game skins, or this stupid 'metaverse' thing that Mark Zuckerberg thinks will be gigantic one day.

Let's break down the "NFT" term because it can apply to more than just digital collectibles, although collectibles are the most common use of NFTs today. 'Non-fungible' means anything unique and can't be copied or reproduced identically. Mickey Mantle baseball card #2574 has a different serial number and is in a different condition than card #0001. On the other hand, something fungible would be an ounce of gold, the same as any other ounce of gold. The 'token' part of the NFT term is a crypto word, meaning a unique alphanumeric code represents the NFT itself. That code gets recorded on a blockchain (which is just a system of record) whenever an NFT changes hands from a buyer to a seller. Because the public blockchain shows all transactions, anyone can easily trace the history of any NFT and see precisely when it was bought and sold and for how much. One significant advantage NFTs have over physical art and collectibles is that they cannot be faked. The scandals in the art world of fake paintings would never apply to NFTs. Certainly an upgrade, right?

The opponents of NFTs complain that owners don't own the original, underlying file like they would in physical art. Instead, they own some weird alphanumeric code. That's literally what you're buying when you buy an NFT - some code. Here's an accurate and hilarious "crazy idea" post from Reddit about giving Putin (of Russia) and NFT to end the war in Ukraine.

Creating and Exchanging NFTs

Similar to crypto exchanges like Coinbase, NFTs have marketplaces, too. The biggest one is called OpenSea. Using OpenSea, you can create an NFT to sell from an image file or buy and sell NFTs using the Ethereum cryptocurrency (Ethereum is #2 to Bitcoin). Selling an NFT by some no-name person will likely attract no buyers. You need clout. One of the most famous digital artists who creates NFTs using her art is known as pplpleaser. She recently did the cover of Fortune; here's a piece on her meteoric rise.
In 2021, OpenSea's revenue went from $95 million in February 2021 to $2.75 billion in September 2021. Calling NFTs 'hot' in 2021 was an understatement. Who's to say how long it will keep growing?

For a bit more commentary, a great YouTube channel for crypto mining recently did a great video on NFTs.

Trades

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• Lindsay, Chloe, Antonio, and Garrett are still sitting on the additional $1000 in cash.
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