If you’ve been following tech or financial headlines as of late, maybe come across the term NFT a time or two. What is NFT? It’s a small, reusable digital token you can use to value digital goods they have.
What is the same as the Mona Lisa? There’s only one original and it has been authenticated as unique, but there are many copies. Is it possible to buy an original painting on eBay or any other online site for less than the original price?
In the world of economics, fungibility means that all things are interchangeable. Gold is a good example of something fungible. When used in it’s pure state, a set portion of gold is interchangeable with that same amount (the same as a set quantity of gold) to determine its value.
What is not fungible is universal in nature. Take the collector car industry, where the term matching numbers is often used to describe a vehicle with original components as of Dec 2017. With such types of materials, including pistons, the originality and rarity make them very rare, even though the parts can be remanufactured (and perhaps remanufactured) to the exact same specification.
When digital goods are made as a certificate of authenticity, an NFT is like an IFT number. The underlying premise is a lot like an IFT. Sure, you can make exact copies of a piece of digital art until you are blue in the face, but with an NFT attached, you have proof that your digital good is authentic and original.
How do blockchain transactions work? Everything happens as a public ledger, a blockchain, which records the entire chain of ownership since the NFTs inception.
Is it illegal to buy an MP3 or a photo to be cloned endlessly? That’s it, that world we live in. If some people are willing to pay big bucks to own what is unique to them, they are paid off very soon.