NFTs seem to be all the rage lately. From sports to arts to entertainment to news to technology, it feels like everyone’s talking about Non-Fungible Tokens.
Maybe it’s worth learning a thing or two about Non-Fungible Tokens. And maybe, just maybe, they’re not as complicated as you think.
Far fewer people, however, seem to know what these NFTs actually are. And still fewer people appear able to cogently explain to others what Non-Fungible Tokens actually are.
One approach for people in the dark about NFTs is to step out on your porch, shake your fist, and tell these New Fangled Things to get off your lawn. Most people don’t have any practical application for NFTs – or, perhaps more accurately, don’t know that they do. If you feel like NFTs are fundamentally a fad that will soon pass, then it’s your prerogative to ignore them.
You may have felt the same way about cryptocurrency at large. It does remain the case that far more people invest in cryptocurrency than actually spend it, and cryptocurrency retains a certain ethereal quality where it has no physical form – and a value backed seemingly by vapors. Yet it proved to be more than a fad. Bitcoin was created in 2009 and it’s still here, with a bigger presence than ever.
So maybe it’s worth learning a thing or two about Non-Fungible Tokens. And maybe, just maybe, they’re not as complicated as you think.
Think of a valet ticket. The unique car is the asset. The ticket is the token.
One key to understanding NFTs understanding the term fungible.
In the world of commerce and finance, "fungible” is the technical way to state that an asset can be replaced or exchanged by another identical item. For example, money is fungible.
fungible means the opposite. For example: gems, real estate, cars, and trading cards are non-fungible because no two are exactly the same. A Honus Wagner rookie card has value like currency, for example, but it’s non-fungible because no two are exactly alike in the exact same condition and the values vary.
The last part is the token. Think of a valet ticket. When you drop off your car with a valet, they hand you a ticket in exchange. The ticket has a serial number that matches a ticket they have, which may include important information that describes the asset, like the Make, Model, and Color of the car. The car is the asset, the ticket is the token.
In an era where so many assets are digital and easy to copy, like digital intellectual property such as artwork, for example, a non-fungible token proves ownership of the original asset.
Annabel Steal in Brand Chain’s PostScript magazine explained NFTs in an article whose title harmonizes with many people’s thoughts on Non-Fungible Tokens: "What on Earth Is an NFT, Anyway?”
Steal puts to use the trading card example, as well.
"If you have a cryptocurrency, trading one unit for another doesn’t really make a difference; you’re starting and ending with the same general thing. But if you have one NFT and you trade it for another, you’re giving away something unique and receiving something completely different — just like if you traded a Juan Soto baseball card for a Stephen Strasburg baseball card.”
"An innovative print distributor or supplier can leverage NFTs and assure the authenticity of the item.”
Essent President and CEO Eric Alessi, quoted in Steal’s article, says NFTs are ultimately about authenticating something unique. Applications in the promo and print industries could include authenticating artwork to claim ownership of it.
"At the end of the day, it’s about being able to authenticate something. If you think about anything that’s printed that may have a serial number on it, like a ticket or a trading card, you can see that it’s a natural fit for an NFT,” Alessi says. "An innovative print distributor or supplier can leverage that and assure the authenticity of the item.”
Essent customer Barker Specialty is one company using NFTs in the promotional products industry. Barker, Alessi says, "is on the vanguard of leveraging NFTs in the promotional products industry” by creating non-fungible token versions of artwork and toys. Digital images are perhaps the most common form of NFTs.
Barker Specialty CEO Gerry Barker tells us that he’s "stoked with the idea of NFTs for high school and college graduation” and thinks "someone graduating from college would like some cool NFT with their name on it, and it shows that they’re the owner of it,” to point to one potential novel application.
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