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NFT's: the trendy nostalgia-inducing investment that could change your life.

By

Skyler Vondra

on

May 28, 2021

NFT's or non-fungible tokens are a new type of asset class that combines all of your favorite things into one: collectible, rare, unique, speculative, all of the above.

The key detail to notice about NFTs is their non-fungible nature. Fungible describes something that is easily replaced by a clone of itself. A perfect example is the United States Dollar. One dollar bill can easily be replaced by another dollar bill, and the value will not change to the holder (unless you collect dollars based on years or serial numbers). A NON-fungible item is pretty much everything else. Most things on the planet are unique and non-fungible in fact, your house, car, computer chair and phone all have unique characteristics that make them noticeably different than other similar items.

That's a pretty broad definition, and that's how it's meant to be, the important part is exactly how non-fungible tokens can be implemented, and the answer is on the blockchain.

Blockchain and NFTs

Blockchain technology allows for the secure and transparent transfer of information or value. At the inception of blockchain technology, the main use was to transfer value, or money over the blockchain. NFTs add an extra layer to this by allowing you to send MORE over the blockchain.

This benefits any part of your life that would benefit from having more security and transparency. If you're an experienced investor, you might have thought one time "do I actually own this stock?" because essentially, you're just trusting your broker that they are holding the stock for you. In reality, you can't see what's going on in the background, anything could be happening.

Have you every bought tickets for a concert or sporting event on the secondary market? You might remember the feeling you had when a sketchy guy outside of the stadium walked up to you while you were holding your two fingers in the air, and when he spits out a price you're just hoping, guessing, gambling that the ticket he's giving you is actually legit, and that he's not trying to rip you off. This type of transaction would benefit more from security and transparency.

How about during the hiring process? If you've ever hired someone for a position at your company, when they send in their resume you're trusting that the things on there are legitimate, or you have to go and verify them. If the line items on a resume were only granted by previous employers who would vouch for their previous employee, you as an employer would feel much more safe giving this candidate an interview.

Previous uses

The pioneer of NFTs are Cryptokitties.

Current Uses

The top NFT by sales volume at the time of writing (02/12/2021) is NBA Top Shot, with over $1 million in sales volume today alone. CryptoPunks has also been gaining a lot of popularity recently, along with Hashmasks.

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