Let's go through some of the basics...
What is an NFT?
At the most basic level, an NFT (Non-Fungible Token) is a one-of-a-kind, verifiable digital asset that can be exchanged between a creator and a buyer. Unlike dollar bills or shares of a stock, each NFT is unique and not "fungible" - aka interchangeable - with one-another.
What makes an NFT valuable?
The value of an NFT comes from the property it represents, which is generally something that exists in the digital world like an original piece of art or digital memorabilia. The NFT itself doesn’t necessarily contain the digital property, but serves as a "certificate of ownership" on the blockchain. Like a concert ticket or a deed to a physical property, an NFT reflects the value of the thing it represents.
Can't I just "right click, save"? How is this different than buying a JPEG?
For the first time in history, due to a set of technologies referred to as "web3", digital items can be limited, or verifiably scarce. Yes, you can right click and save to your computer. Just like you can take a picture of a famous painting. This wouldn't affect value of the NFT or of the painting itself.
What is web3? What about "web" & "web2"?
- The first iteration of the world wide web, or the "web", involved material that was traditionally in print form coming online - like books, magazines and newspapers.
- Web2, the social layer, allowed anyone to share info or material they created online. Users create and share content on platforms, aka large internet companies that monetize via selling data and ads.
- Web3 leverages blockchains and allows for ownership in the digital age. It enables instant peer to peer payments over the internet. Scarce digital assets, microtransactions and smart contracts will define this next layer of the web.
What’s the connection between NFTs and cryptocurrency?
NFTs aren’t cryptocurrencies, but they are built using technology similar to Ethereum and Bitcoin - known as "web3 rails". Also, like cryptocurrencies, NFTs exist on a blockchain, which verifies their unique identity and ownership. This means the blockchain keeps a record of all the transactions connected to the NFT and the property it represents.
Are NFTs the future of art and collectibles?
It depends on whom you ask. Artists, musicians, athletes, celebrities, and others find NFTs attractive because they offer a way to directly monetize digital content in a way that wasn't possible before. NFTs can have royalties built in which benefit the artists in perpetuity. Galleries see potential for reaching a new generation of collectors.
Why musicians + fans + NFTs?
There are only a handful of ways that artists retain a direct connection with fans, without a platform or gatekeeper standing in the way. NFT's give artists a direct connection to fan wallets who will be able to engage in creative ways in the future like airdrops, fan-club verification and more.
Supply chain issues and vinyl manufacturing delays are hurting artists' already shrinking revenue streams. NFT's offer a way for artists to offer "authentic" digital goods which don't rely on the physical infrastructure that traditional products do.
Fans are familiar with the concept of a "limited pressing" vinyl or physical merch, which are valued due to their uniqueness. We believe limited digital products will be valued similarly, and arguably higher due future benefits bestowed upon the owner of the NFT.
For a more detailed explanation of NFTs and the technology behind them, check out these other great resources: