People are so confused about NFTs.
Part of the confusion is that they’re being misrepresented by the current hype cycle.
The first problem is that they have the wrong name. They’re named in contrast to Bitcoin and other cryptocurrencies instead of being called what they really are.
It would be like calling money “Currency” and cars and homes “Non-fungible Stuff”.
But that’s not what we call them. We just call them “Assets”.
So, similarly, NFTs should simply be called “Crypto Assets”. Let me explain.
Fungible simple means that the individual items have no difference from each other - so therefore each item is equivalent and easily exchangeable for the other.
For example, any dollar can be exchanged for any other dollar. Any Bitcoin can be exchanged for any other Bitcoin.
Homes, cars, boats (and stupid animated gifs) are NOT equal and easily exchangeable with each other. They’re unique. They are non-fungible.
Side note: the reason society switched from the batter system to using money is because money is fungible. It’s easier to buy fruit with fungible money than by trading a non-fungible goat. The fruit guy might not WANT a goat!
Just like Bitcoin is currency (fungible) represented by tokens (unique numbers) on the blockchain, NFTs are just any OTHER kind of (non-fungible) asset on the blockchain.
So if we call Bitcoin a “Crypto Currency” we should just call all the other stuff “Crypto Assets”.
But here’s the thing: It’s not about memes and digital artwork. It’s about registering and tracking ownership of ANYTHING on the blockchain.
Why? Because blockchains are decentralized and transparent vs governments and private databases which are controlled by legacy institutions and politicians.
Bitcoin is the way we digitize gold/money. NFTs are the way we digitize everything else.
Eventually your marriage and your home ownership records will be NFTs.
That’s not a guess. It’s a fact. Just a matter of time.