NFTs…you’ve heard the word, you’ve seen it flash across your screen, but what actually is an NFT? Look no further, this article will give you an accessible introduction to what your techy Uncle couldn’t shut up about during the holidays.
Let’s start with the basics. Bitcoin, you’ve heard of it, right? If not, Bitcoin is an online currency. This is also known as ‘decentralized currency’, more specifically meaning there is no bank, government, or administrator. Within this framework, anyone can trade any amount of Bitcoin. The main takeaway is if you were to trade one Bitcoin for another, you would get the exact same value.
NFTs are a little different. NFT stands for “non-fungible token”, aka, any NFT you buy is a unique, one-of-a-kind version. Unlike Bitcoin where you can trade it amongst your peers and have the exact same thing, NFTs are distinctly unique. How does one do that? How does someone know that the NFT you possess is solely yours, especially if you are trading this all online?
This is where it gets a little hefty with definitions. Let’s start with blockchain. All cryptocurrencies are built with blockchains. But what are they? Blockchains are a secure database that holds records of transactions. They do this by collecting data in ‘blocks’ and once that block is full of data it connects to the previous block of data and creates a chain, or in other words, a timeline of who possessed a particular cryptocurrency. Within these blockchains are ‘smart contracts’, which provide an automatic verification of a transaction between both parties when certain conditionals are met. This adds another layer of security and ensures a secure and safe transaction.
Ethereum, also known as Ether or ETH, is the second largest cryptocurrency on the market and is the primary cryptocurrency that uses NFTs. Bitcoin’s blockchains are purely made for the usage of online currency, an equal one to one ratio. Etherum’s blockchains, however, are built to be more expansive. Within the Ethereum blockchain, NFTs have unique metadata that cannot be replicated.
Think of NFTs as a collector’s item, whether baseball cards, Pokemon cards, or train sets, once you buy an NFT you become the owner of that item in the digital world via certification of authentication. Even if someone screenshots your NFT or downloads it to their phone, you possess and own the original file. NFTs can be images, gifs, tweets, human artwork, AI artwork, audio clips, video clips, memes, etc.
They are now becoming so commonplace that even celebrities are getting on the NFT craze! Paris Hilton while on the Tonight Show gifted Jimmy Fallon and everyone in the audience with their own Paris Hilton NFT. NFTs are even predicted to be the future of copyright claiming music, buying virtual land, and even being used as concert tickets.
Not only that, but people are beginning to use NFTs as centerpieces for their businesses. Organizations such as CleanOcean are dedicated to using NFTs as a platform to receive funds to help propel the cleaning of oceans, as well as rewarding said volunteers and enthusiasts with tokens of their own.
The scope of NFTs are expanding each day! Just like The Miner Agency! If you or someone you know needs help with marketing, PR or keeping your business up with emerging trends and technologies we’re here to help your business take off!