NFTs, everyone is getting used to reading and watching the news about some random NFT that is being sold for some juicy cash, I mean JUICY! We are talking about hundreds of thousands of dollars and, in fewer cases, MILLIONS of dollars!! đź’¸ So, for the newbies, what is the real meaning of NFT?
First, to understand it right, let me explain the concept of a “fungible” token.
A Fungible Token is a token that is not unique, can be divided and is interchangeable. An example of Fungible Tokens is FIAT currencies ( USD, EUR) or cryptocurrencies (BTC, ETH). Each coin has the same value as any other coin of the same type at any given moment. For me it is the same as you give me 10 USD or my cousin, it will have the same value. Also, I can go and divide the 10 USD into 10 coins of 1 USD each and will keep having the same value. That is fungible.
Now comes the good part. Let’s get technical here: What is an NFT?
An NFT is a Non-Fungible Token. A Non-Fungible Token is a token that is unique, can’t be divided and can’t be replaced for something else. I mean, if I buy an NFT there is only a piece of my NFT. I can’t break it into little pieces because then, it would be fungible.
In this image, you can see some other examples of the difference between fungible and non-fungible tokens.
Another example would be this:
I have a collectible card and you wanna change yours for mine? If I give you mine and you give me yours, I will have a card still but it would never be the same card as mine because you gave me another one, not mine. If you are a collector you will get it. What is the difference between a signed t-shirt and the same t-shirt? The sign, the fact that someone important touched it or signed means something to anybody…
After this you are gonna say, yeah it’s all good about non-fungible and fungible but still, I don’t get why NFTs cost that much.
I get it, stay cool because I’m gonna bring the good stuff right now. The biggest advantage of NFTs is that thanks to Blockchain technology you can check with 100% accuracy who is the real owner of the asset, and trace back where the NFT came from (you will see who owned it before you as the example from the t-shirt). Who do you trust more in finding value, Barack Obama or me? It’s clear, Obama by much.
All this part is about status, ownership and scarcity. We will always want to have a part of something that we know is scarce. But, NFTs bring a lot more utility to the world. How do you travel these days? With QR codes. How do you enter nightclubs, museums, and galleries? With tickets and QR codes. How do you get chosen to go to your favorite team’s important game? By being a frequent fan with your seat in the stadium. That’s why NFTs go far beyond speculation and animals selling for a lot of money.
Let’s bring some examples of real utility that are being implemented at the moment by some important people:
VeeFriends is an NFT collection created by Gary Vaynerchuk. Talking about Gary is almost like talking about NFTs. I don’t remember a time that I thought about him and didn’t think about NFTs. This guy is bringing real utility to the NFT world.
As a utility for holding a VeeFriends NFT, he created the Vee Conference. The tickets for this conference were sent to every holder of a VeeFriends so, if you wanna get into the conference either you hold an NFT or you will have to buy the ticket from some holder (if he is willing to sell). This is an event taking place one time a year for 3 years where you will be able to access many important and famous people, iconic leaders from culture and web3. This year was the first one taking place at the US BANK STADIUM, in Minneapolis, Minnesota. Some of the Speakers were Snoop Dogg, Pharrell Williams, Steve Aoki, Logan Paul and many other important people.
If you wanna check a bit more about what went down in the Vee Conference, check the recap because you will love it!
This one also involves Gary Vaynerchuk but this time, it’s THE FIRST NFT RESTAURANT! This means that to be able to enter this restaurant you will have to hold an NFT from the restaurant’s collection (to this day, the cheapest one is around 4 000 USD).
The restaurant will be located at a premium location in New York City. It’s simple, you wanna have dinner at Flyfish Club? Go buy an NFT (again, if someone is willing to sell their NFT/table). Maybe some of you think: oh why would I want to go to a restaurant and first pay 4K to get a table? Because it's scarcity and you will want to! That’s how humans function.
These are only 2 of the many examples of real utility. This is real value, this is the final meaning of NFTs in the world. This is the way all NFT projects should be but, the problem is that most of them can’t deliver the final product. That’s why most NFT projects will die someday and only the ones bringing real utility will keep alive.
In another article, we will cover how NFTs are being used nowadays and how can be used in the future in Sports (Soccer, Basketball). Hope you have liked this one and at least have a better understanding of the bright future of NFTs!