NFTs, explained: what they are and why theyre suddenly worth millions

Louis works with various publishers, credit bureaus, Fortune 500 financial services firms, and FinTech startups. In addition to Insider, you can find his work on Experian, FICO, Credit Karma, FICO, and Lending Tree. Louis DeNicola is the president of LD Money Media LLC and an experienced writer who specializes in consumer credit, personal finance, and small-business finance. He is a Nav-certified credit and lending specialist, a multi-year attendee of an 18-hour advanced credit education seminar, and a volunteer tax preparer through the IRS's VITA program. Fungible items can be exchanged with one another with ease because their value isn't tied to their uniqueness.

NFTs can make collectibles like trading cards more interactive and engaging. As prices for NFTs increase, the clubs behind these NFTs become more exclusive. Notable members of Bored Ape Yacht Club include Stephen Curry, Snoop Dogg, Jimmy Fallon, Post Malone, The Chainsmokers and the list goes on. Most of these celebrities show off their apes by using them as their profile picture on Twitter, further expanding the influence of the brand. Could be embedded with a predetermined time for a personal meet-and-greet with the founder of a company or a brand's celebrity spokesperson.

“Essentially, NFTs create digital scarcity,” says Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures. Some experts say they’re a bubble poised to pop, like the dot-com craze or Beanie Babies. Others believe NFTs are here to stay, and that they will change investing forever. The offers that appear in this table are from partnerships from which Investopedia receives compensation.

The term NFT clearly represents it can neither be replaced nor interchanged because it has unique properties. Physical currency and cryptocurrency are fungible, which means that they can be traded or exchanged for one another. NFTs power a new creator economy where creators don't hand ownership of their content over to the platforms they use to publicise it. An artist publishing work on a social network makes money for the platform who sell ads to the artists followers. They get exposure in return, but exposure doesn't pay the bills. Content creators see their profits and earning potential swallowed by platforms.

In September 2021, thriller film Zero Contact became the first feature-length movie to be released as an NFT; weeks later, pandemic-themed thriller Lockdown followed suit. In October, Tom Brady's NFT platform Autograph launched a music vertical, with The Weeknd as its first signing. Non-fungible tokens are cryptographically unique tokens that are linked to digital content, providing proof of ownership. Non-digital art -- and even some digital arts -- face difficulties of authentication, which reduces ownership utility because it's hard to know if a piece is fake or authentic. Blockchain technology addresses this authentication issue, value from ownership could be enhanced.

Cryptoslate.com needs to review the security of your connection before proceeding. If you don’t already have a crypto exchange account, Coinbase and eToro are good options for beginners. NFT data stored by NFT.Storage can be accessed from the decentralized IPFS network from any peer that has the content. CIDs reference immutable content so you can be sure the content you access is the content referenced in the NFT. With the right API, contract address and token id, anyone can find NFT metadata on OpenSea and Rarible.

Not to mention that digital items often only work in the context of their product. For example you can't re-sell an iTunes mp3 you've purchased, or you can't exchange one company's loyalty points for another platform's credit even if there's a market for it. Blockchain technology and NFTs afford artists and content creators a unique opportunity to monetize their wares.

Pictures of apes have sold for tens of millions of dollars, there’s been an endless supply of headlines about million-dollar hacks of NFT projects, and corporate cash grabs have only gotten worse. There’s nothing like an explosion of blockchain news to leave you thinking, “Um… what’s going on here? ” That’s the feeling I’ve experienced while reading about Grimes getting millions of dollars for NFTs or about Nyan Cat being sold as one. Non-fungible tokens are commonly ERC-721 tokens on Ethereum’s blockchain. Unlike ERC-20 Ethereum tokens, ERC-721 tokens each have a distinct value. Since each NFT holds its own value, they can’t be exchanged for one another like normal cryptocurrencies.