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When news hit that billionaire Jack Dorsey was selling a tweet for $2 million, all eyes turned to the funny-sounding tech term: NFT. Then, the auction soared above $2.5 million, and minds were really blown. What is this N-F-T? And how can I profit off of it?
An NFT or Non-Fungible Token is a fancy way of saying that a digital asset is unique. As if someone got their hands on a 1992 Shaquille O’Neal Classic 4 Sport Auto #1 basketball card, an NFT is a “yours-to-keep” kind of virtual property created, sold, and stored on blockchain. Since every transaction on blockchain is recorded, virtual ownership can be quickly and safely swapped. Once the buyer’s check clears, or rather, the cryptocurrency empties from their virtual wallet, that NFT is theirs and theirs alone.
Since NFTs are a fairly new concept, it’s reasonable to think that they would be far and few between. That would be wrong. Since conception, NFTs have become as common and as expensive as trading cards or even art. People from around the world buy and sell NFTs, bumping prices with every transaction. The rarer the NFT, the more valuable it is deemed. For collectors, this means getting a chance to own unique digital items and show them off to their friends (without their spouses demeaning their use of closet space). For profiteers, this means holding on to those digital assets until a collector or another profiteer is impatient enough to pay ridiculous prices.
NFTs are popping up all over the internet. Elon Musk’s artist wife, Grimes, sold $6 million worth of digital artworks as NFTs, and even a silly internet meme is being sold at auction as a one-of-a-kind piece of crypto art. Even Nike is jumping on board, as they now hold a patent for blockchain-based sneakers called ‘CryptoKicks’. The rush to buy these unique digital items is causing prices to rocket, as people want to get their hands (virtually speaking) on the rarest NFTs they can find.
If anyone remembers trading cards games like Pokémon or Magic: The Gathering, ripping open a pack and finding a super rare card meant more than enhanced gameplay, it meant being able to sell that card for a wild profit. The video game industry has recently jumped on that bandwagon, creating games that use NFT assets. Online trading card games like Doctor Who: Worlds Apart are not only fun to play but allow gamers to own their virtual deck of cards and sell them when the value of those cards rise. Like any NFT, the trading cards bought and sold on the gaming platform are unique and fully owned by the player. There may be 500 copies of that card in circulation, but there will never be any more than that. When the 501st player wants to get their hands on it, they’ll have to shell out huge crypto-bucks to do so.
There are many games in development that utilize NFTs, as they incentivize gaming by rewarding players with ownership, rather than digital assets that are worthless. As reported by Venture Beat, when a player stops playing a normal game, the money they spent is gone and in-game assets are essentially worthless. However, if they own NFTs in the game, like virtual plots of land or legendary items, they can put them up for sale and make back some dough. Many analysts believe that all games will incorporate some kind of NFTs in order to incentivize players to invest more time and money in the game, so they can earn unique rewards- rewards that they actually own.
The future of the internet might just be virtual ownership. Sure, users can still browse Twitter or Facebook and take glances at posts free of charge, but the increased interest in owning parts of the internet, like virtual art or digital, in-game assets, has given NFTs a chance to flourish. Perhaps one day all parts of the internet will be up for purchase and we’ll all be retiring on our own virtual islands, sipping mimosas from NFT champagne flutes, trying to sell the latest trading card we accidentally purchased for more than it’s worth.