Thread by @MorningBrew

1/ Right now, the term NFT (non-fungible token) is getting tossed around more frequently than the hottest of potatoes

a thread explaining what NFTs are and why people are paying so much money to own one

2/ One of the reasons why NFTs are so difficult to grasp is that they don't exist in the real world

they are digital assets like an image or a gif

this sweet rotating shoe is an example of an NFT that sold for $13,331 back in November

3/ But what makes it an NFT rather than just a cool gif?

for starters, it's unique

NFT stands for "non-fungible token"

fungible = something that's interchangeable

non-fungible = something that's one-of-a-kind

4/ If you take one thing away from this thread, it should be that NFTs are unique, one-of-a-kind assets

5/ Before NFTs, digital assets could be easily duplicated

screenshot a picture, and boom, now there's two of them

6/ But taking a picture of the Mona Lisa doesn’t mean you own the Mona Lisa

the same is true for an NFT

if you screenshot an NFT, you own a copy, but not the real thing

the only way to own an NFT is to buy it through a transaction that is recorded on the blockchain

7/ The blockchain is a way of publically documenting transactions

you buy this sweet piece of artwork from the artist @Mad_Dog_Jones? that deal shows up on the blockchain

now there is a public record of your proof of ownership

8/ NFTs establish 1) authenticity and 2) chain of ownership for a digital piece

in short, NFTs have turned digital assets into something that can be scarce and valuable, much like IRL art

and recently the market has popped off

9/ Remember @Mad_Dog_Jones? He made $4 million in 9 minutes

https://twitter.com/tzhongg/status/1362564989924511744?s=21

10/ A Lebron highlight sold for $208,000 last night

https://twitter.com/joepompliano/status/1363970659307696130?s=21

11/ And the famous internet meme Nyan Cat was sold by its original creator for around $580,000 last Thursday

https://twitter.com/nytimes/status/1363862394582237186?s=21

12/ As for the question, "Why the heck would someone pay over half-a-million dollars for a poptart cat?"

for the same reason someone would spend $1.4 million on a piece of shredded Banksy art

beauty is in the eye of the beholder, and someone rich wanted to own it

13/ In conclusion, this thread is just the tip of the NFT iceberg

there are even more uses for NFTs outside of buying and selling art

ticketing to events, digitized forms of IDs like passports, and limited edition items in video games are a few more use cases being explored

14/ NFTs made it so that unique digital items could be bought and sold with ease

it's still the early days, but the size and frequency of NFT transactions shows that the stage is set for this whole new asset class to make its way into the mainstream