Baskadia

What exactly is an NFT?

It’s a digital asset that represents some real-world object like

music, art, in-game items, or videos. NFTs are bought and sold

online, often with cryptocurrency, and are usually encoded with

the same underlying software as many cryptos.

NFTs are becoming well-known now, though they’ve been around

since 2014, because they’re an increasingly popular way to buy

and sell digital artwork.

Conti and Schmidt report that “a staggering $174 million has been

spent on NFTs since November 2017.”

NFTs are usually either one of a kind, or one of a very limited run,

so they have unique identifying codes. Arry Yu, chair of the

Washington Technology Industry Association Cascadia Blockchain

Council and managing editor of Yellow Umbrella Ventures says

they “essentially … create digital scarcity.”

This contrasts with most digital creations, which are almost

always practically infinite in supply.

So, cutting off the supply of a given asset should raise its value

(assuming it’s actually in demand at that moment).

Many NFTs, especially nowadays, have been digital works that

already exist in some form elsewhere (like securitized versions of

digital artwork that’s already out on Instagram).

Why are people willing to spend so much money on something

they could screenshot or download elsewhere?

“Because,” say Conti and Schmidt,