“NFT this,” “Bitcoin that,” “cryptocurrency is all the rage.” These are some popular phrases no doubt, but if you’re someone who has absolutely no clue what any of that means, well you’re not alone. The world of cryptocurrency is a new, and confusing, one. So we here at The Honey POP have taken it upon ourselves to try and give you a quick rundown on what NFTs are and why so many artists are starting to use them!
What is an NFT?
In the simplest of terms, NFT stands for non-fungible token. Does that explain anything about what it is? No, but it’s a good place to start.
A non-fungible token uses blockchain technology to assign value to and monetize digital goods. It’s similar to something like Bitcoin, which is another type of cryptocurrency. Unlike Bitcoin, however, NFT is unique. If you trade one Bitcoin for another, you still have a Bitcoin worth the same amount. If you trade an NFT, the value changes because NFTs are unique.
Now dear reader, there’s a strong possibility that you’re thinking, huh?!?!
That’s completely valid. The concept of an NFT is a relatively new one, and since they’re just starting to gain popularity, there’s tons of information coming out. It can all get very technical and confusing, so, let us try and give you a simpler example.
Let’s say your favorite artists decide to tokenize one of their songs and turn it into an NFT. That song is now a unique NFT, you can trade it or sell it if you buy, but because there’s only one of that song, whatever you trade it or sell it for won’t have the same value. Halsey is a great example, she’s releasing an NFT series on March 17th. If someone were to buy into that NFT, they’d have unique digital ownership of that series, which is not something you can easily sell or trade. It’s a way to own one-of-a-kind digital content from your faves! Other artists like Verite are also getting into the NFT game, so we’re going to be seeing a lot more of them soon.
How does it work?
If you want more of a technical understanding of NFTs, you can check out this explanation. The basic breakdown is as follows: Buying NFTs doesn’t give you sole access to the work, but it does allow you to claim a certain degree of ownership. They use blockchains and act as a sort of digital certificate of ownership. The term “non-fungible” basically means that you can’t duplicate that NFT and its specific value the way you can with something like Bitcoin. It assigns a unique code to the digital asset and then turns it into a token as part of a blockchain. The blockchain is used to record NFT transactions and give buyers proof of authenticity and ownership.
One of the most notable examples of NFTs is Jack Dorsey’s tweet. The founder of Twitter is selling his first tweet as an NFT for a couple million dollars. Now, this doesn’t mean that the winner now owns the tweet and no one else can see it. It’ll still be visible for the rest of Twitter to see, but whoever wins the bid gets the right to say they own it. The owner of an NFT can decide what they want to do with that asset once they buy it. However, the creator of that asset can use its code to limit how and where that asset is used. For example, preventing it from ending up on certain platforms.
Whew! If you made it to the end of this article, kudos to you! You’re now, hopefully, a little more educated on NFTs and how they work! And if not, that’s okay too. As we said, it’s all very new and confusing and can get kind of overwhelming! Whatever the case may be, we’re certain there’s going to be a lot more information out there soon and we’ll be keeping an eye out!
If you wanna chat with us more about NFTs or have any questions, leave a comment below or hit us up on Twitter over @TheHoneyPOP!
Featured Image Source: Aman Shamim