An elder millennial’s guide to Gen- Z things, in this case: NFTs
The internet is a weird place full of even weirder things. It’s where Godwin’s Law is as strong as gravity and where you are more likely to bump into Tiffany Haddish’s boyfriend than common sense. If you have kept your ear to the digital streets then you will have heard rumbling about something called NFTs or Non-Fungible Tokens. Earlier this month the queen of controversy Azalea Banks sold her audio sex tape as an NFT for $18,000 and it is now worth hundreds of millions. She’s not the only one. Recently Twitter founder and CEO Jack Dorsey sold an autographed copy of his first tweet for almost $3 million. Canadian musician and wife to Elon Musk, Grimes, sold nearly $6 million worth of art and the 18-year-old digital art prodigy known only as Fewocious has become almost an instant millionaire thanks to his NFTs. As with the Bitcoin craze though, trying to figure out just what NFTs are is a little tricky. That said, if you need a crash course and you’ve been wondering WTF are NFTs and why was Jack Dorsey’s first tweet sold for $3 million?, here’s a guide:
So WTF is a Non-Fungible Token?
Despite what it looks like, “fungible” is a real word. According to the Oxford Dictionary “fungible” means “replaceable by another identical item; mutually interchangeable”. The term relates primarily to goods or commodities that are the same or interchangeable. So for all intents and purposes a R10 note is a R10 note. It is interchangeable. Something non-fungible is unique. The Mona Lisa is non-fungible or would be if one couldn’t forge it. So basically NFTs are what happens when someone turns cryptocurrency into art.
So why are they making so much money and why should we care?
Well, essentially NFTs work like other cryptocurrency but the difference is that they are unique pieces of art and by art we mean it in a broad sense. NFTs can be music, visual arts or just about anything else. Unlike traditional cryptocurrency, they essentially take the concept of how scarcity equals value and feed it unfiltered steroids. So at the NFT supermarket you may pick up a drawing for R0,31. That drawing gets sold on for a bit more and a bit more each time and eventually it snowballs into some kind of ridiculous number. Once made, an NFT cannot be replicated, hacked or otherwise altered. So essentially one is in a marketplace that deals in Mona Lisas. Another attractive feature is that the person who creates the NFT gets a portion of the proceeds of each re-sale.
As a digital currency it has become a popular new frontier for the next generation of wealth hoarders. This is both its greatest strength and its achilles heel. As with cryptocurrency, NFTs have astronomical perceived value and in very specific marketplaces can be traded but generally they are supposed to just sit there and accumulate value. Unlike real world pieces of art though, you are likely to have a much harder time selling your pieces for currency that you can use in the real world. Perhaps that is the point, however. The world is careening merrily toward an entirely digital future. In the same way that the Randlords and colonists built generational wealth off the back of the resource booms, this may just be the way that a new era of digital randlords get in on the ground floor. This might be exactly how the world repopulates the 1%.