What is an NFT?


I’m seeing this everywhere, but I’m not sure I understand the concept.

In: Technology

In what context? What does it stand for?

Were you in Devin Nash’s stream?

I’m not an expert on them or anything, but from what I’ve seen they’re a complete waste of time. Maybe some will be made that will actually be interesting/ have actual value. But the ones I’ve seen are BS “content” just like pictures or some stupid shit that someone probably made in less than an hour. I think their value comes simply from “being the only one to have it”. Like if I took a pic of my dick and claimed it as an NFT, someone could buy it with the sole purpose of being the only person to have it. I’m an average person, but if I was to become famous or something, then I suppose the dick pic could gain value lol. Most of the ones I’ve seen are things anyone can see online and screenshot/print out. Technically you would be the only one with it since your copy would be the only truly legit copy, but it would probably look identical to all the fake ones, if they’re copied corrected, which would take 5 minutes to do.

TDLR: NFTs are stupid and they only gain value because idiots and rich people buy them.

If I’m wrong, anyone please feel free to correct me, but as of right now, NFTs seem absolutely pointless to me, and shouldn’t produce value. But also, they’re gaining popularity for one reason or another, my theory is stupid people raising their value, but other than that I don’t know. So perhaps there’s a flaw in my thinking.

Nft stands for non fungible token. It is a way to digitally represent ownership of something digital (NBA topshots is a good example of this) backed by the same technology that underpins crypto currencies. It’s called a block chain, and uses encryption and distributed computing power to validate all transactions. In other words, you can “own” a digital picture or video and have proof that you do, which cannot be copied or replicated.

Non-Fungible token. Fungible tokens (like say bitcoins) are functionally indistinguishable from one another and thereby interchangeable: one Bitcoin is as good as any other and it’s not of any particular importance which one you have.

Non-fungible tokens (like say NBA Top Shots) are unique and non-interchangeable.

It’s basically an exclusive cryptographic certificate that can be transferred, bought or sold on “the blockchain”, and its unique feature is… that it’s unique. There’s only ever one copy of a particular NFT in existence at one time, they can’t be duplicated or split. It’s like owning a *special edition* bitcoin, the only one of its kind ever made, which can have a message printed on it like “the bearer of this coin is the exclusive owner of <asset>”

The asset can be real or imaginary, and the exclusive claim that’s made to it, might be enforceable or not in real world law, but it isn’t enforced in any way by the blockchain. So for instance, Justin Bieber could sell a NFT that says “The bearer of this token is hereby named the Superfan, and is entitled to hit Justin up twice per month for some online gaming.” Some rich fans would probably pay big big money for that, so that NFT might be traded around at very high value. But it would then be entirely up to Justin whether he wants to honour the promise or not. If he doesn’t, the resale value of the NFT would probably fall, but the blockchain doesn’t care about that. All it guarantees, is that there’s only ever one Superfan at a time.

NFT stands for non fungible token. It’s a term that is used for cryptocurrency like assets that instead of having the same value (1 BTC is the exact same as any other BTC), have unique attributes tied to them. They also generally can’t be divided into pieces like currencies.

Like cryptocurrency you can transfer ownership of them from one place to another, and there are rules established for how they can be generated, and used.

One thing to look into is cryptokitties which is a big example of one of the first major NFTs.

Maybe someone can explain why would someone burn physical art and “replace” it with an NFT?


**Please read this entire message**

Your submission has been removed for the following reason(s):

* ELI5 requires that you *search the ELI5 subreddit for your topic before posting*.

Users will often either find a thread that meets their needs or find that their question might qualify for an exception to rule 7.

Please see this [wiki entry](http://www.reddit.com/r/explainlikeimfive/wiki/how_to_search) for more details (Rule 7).

If you would like this removal reviewed, please read the [detailed rules](https://www.reddit.com/r/explainlikeimfive/wiki/detailed_rules) first. **If you believe this submission was removed erroneously**, please [use this form](https://old.reddit.com/message/compose?to=%2Fr%2Fexplainlikeimfive&subject=Please%20review%20my%20thread?&message=Link:%20https://www.reddit.com/r/explainlikeimfive/comments/lxzyk7/-/Please%20answer%20the%20following%203%20questions:1.%20The%20concept%20I%20want%20explained:2.%20Link%20to%20the%20search%20you%20did%20to%20look%20for%20past%20posts%20on%20the%20ELI5%20subreddit:3.%20How%20is%20this%20post%20unique🙂 and we will review your submission.