People are spending millions on NFTs. What? Why? - Deepstash
What is an NFT?

NFT stands for Non-fungible token.

  • cannot be exchanged/replicated/replaced because they are unique.
  • allows you to buy & sell ownership of unique digital assets.

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Fungibility (no it has nothing to do with fungi 🍄)

Fungible→ something replaceable/exchangeable.

  • Currencies & goods are fungible because they are interchangeable with items of the same value.
  • Ex: exchanging one 5$ bill with five 1$ bills because both have the same value.

Non-fungible→ something unique & irreplaceable.

  • Items of sentimental/historical/unique value.

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How do NFTs work?

They use the same blockchain technology that most cryptocurrencies use.

Most NFTs are part of the Ethereum (a cryptocurrency) blockchain but other blockchains can implement their own versions of NFTs.

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Buying NFTs

NFTs are designed to give you something that can’t be copied: ownership (though a creator can still retain copyright).

Much like how physical art collecting is seen as a value-holding investment, now so are NFTs. However, instead of receiving an oil painting on canvas 🖼️ to hang on your wall, you get a JPG/MP3/GIF/etc file 🤷🏾‍♀️.

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Wtf?!

The founder of Twitter sold his tweet as an NFT for under $3 million.

Someone paid almost $390,000 for a 50-second video by Grimes while another person paid $6.6 million for a video by Beeple.

Nyan Cat meme from 2011 sold for about US$590,000 in an online auction last Friday, February 19.

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What‘s the point?

Selling NFTs could be like selling a van Gogh painting, except instead of getting to appreciate a physical copy of something, you get a trading card.

People will still be able to access & distribute the asset that you bought but you own it (without any copyrights though).

So basically, you get bragging rights.

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Selling NFTS

The creator just gets a shit ton of money and still gets to enjoy copyrights of their work so..... Win-win situation 😉.

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Are NFTs bad for the environment?

NFTs are at least partially responsible for the millions of tons of carbon dioxide emissions generated by the cryptocurrencies used to buy & sell them.

Cryptocurrencies are built on a system called proof of work to oversee transactions.

The system forces "miners" to solve complex puzzles for a reward.

The process is incredibly energy inefficient on purpose, making the "miners" use up inordinate amounts of electricity (that they have to pay, for making it less profitable for them to mess up).

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