If you’ve only heard about NFTs on the news, it can be tempting to write them off as a pyramid scheme or a flash in the pan – but there’s more going on with them than meets the eye, and we’re here to help you understand exactly why.
If you haven’t even heard about NFTs yet, don’t fret – they’re an evolving and ongoing trend that won’t be disappearing any time soon. Your kids assuredly know what they are – they might even be investing in them.
So what are they?
NFTs (or Non-Fungible Tokens) are unique pieces of data stored within a digital ledger on a decentralized computer network. That might sound complicated, but a simple way to think of it is that a creator can complete a digital work, upload it, and sell it to an individual user for cryptocurrency.
The new owner is verified through the underlying technology (called blockchain) which is publicly viewable by anyone who cares to look. From that point forward, the buyer is the proud owner of their own piece of digital art. Unless, of course, they decide to sell it.
This tech isn’t limited to being art, though that’s a highly popular option these days. NFTs are more than meets the eye – quite literally – and can provide access to membership clubs, video game items, tickets, and more. Further, the images can be used as a profile photo on social media sites, representing the identity of its owners, much like a person carrying around a branded Louis Vuitton bag. One such example is The Bored Ape Yacht Club, which is just a sought-after collection of cartoon monkeys that combines several of these elements and fetches somewhere between $150,000 to $420,000 apiece.
There are plenty of reasons to want to be included in this market that go beyond simple ownership and bragging rights – though those reasons are attractive to buyers too, of course. Aside from exclusivity, it gives purchasers a direct connection to their favorite creators who in turn get paid automatically every time their item is resold. Then there’s the possibility of market appreciation. Some digital works become highly prized (and therefore highly expensive).
As the NFT space widens and the market grows, there are more uses for this technology becoming evident every day. NFTs are expanding to include music, writing, and even real estate. It’s tracking to become a great way for creatives to take ownership of their work, and owners to have a more open and transparent resale market. They can even collect ongoing royalties each time their work is resold or utilized.
Z-llennials are arguably spending more time online than any generation before them. As a result, they will be exposed to this new flow of technology in ways that it’s difficult to fathom now. It’s likely that many of them will be living partly digital lives, whether we like it or not! And needless say, as this technology continues to rise, so too will the increasing need for people who can build this tech.
There are some problems with the NFT landscape, sure. We’re still in the wild west days of the blockchain. But it’s an exciting time to pay attention to developments as they arise, and now you know enough to hold your own if the subject comes up with your kids.