This was a monumental year for NFTs. The most expensive NFT was sold for $69.3 million. The market cap (total money in NFTs) of NFTs went from $17 million in January to $3.25 billion in August (19,000% increase in 8 months). The trading volume went from $4.75 million to $6.5 billion in the last year (141,000% increase). And finally, this year, the number of people that own an NFT went from 1 million to 25 million. This is truly insane exponential hockey stick type growth, and things are just getting started.
You may be thinking, “Alright yeah, that sounds pretty wild but WTF is an NFT and why should I care?”
WTF is an NFT? No, NFTs are not Northern Fried Tacos and they are not Ninja Fighting Tattoos. NFT stands for non-fungible token. To understand what non-fungible means, let’s first understand what fungible means. When something is fungible, that means it can be exchanged for something else of equal value. For example currencies like the USD or Bitcoin are fungible. You can exchange any $5 bill for any other $5 bill and you'll have the exact same thing.
How Do NFTs Work? NFTs are possible thanks to the technology of the blockchain, which is the same technology that powers Bitcoin. The blockchain can be thought of as a public decentralized database, where anyone can see what is currently stored on the blockchain and see the full history of all transactions. Therefore, with NFTs, you can see a record of when the NFT was created, who currently owns it, and the history of all the transactions for that NFT. These NFTs uniquely represent pieces of media that can be anything digital, including art, videos, music, gifs, games, text, memes, and code.
Use Cases For NFTs There are many different use cases for NFTs today but given that it is such a novel technology, new use cases are continuing to be created every day. Here are a few of the use cases that are covered in this episode.
In this episode, we also discuss how NFTs are giving unprecedented financial power to creatives, how NFTs will change internet culture, how to buy NFTs, and what to look for when investing in NFTs.
NFTs are still early, and will evolve. Their utility will increase as digital experiences are built around them, including marketplaces, social networks, showcases (virtual museums, your own space in the Metaverse), games, virtual worlds, and more. Someday every internet community might have its own micro-economy, including NFTs and fungible tokens that users can use, own, and collect.
Still uncertain about some of these concepts or have follow up questions? Feel free to reach out to Julian through Instagram (@infinitejuliaan) or Twitter (@infinitejuliaan).
Visit inventingthefuture.ai for the full show notes, which includes a full transcription of the conversation, a link to the YouTube Video interview, the top 3 value bombs, people & resources mentioned, and more!
This podcast is hosted by Julian Alvarez, the Co-Founder & CTO at Vize and a Software Engineer at Facebook.
