You’ve seen NFTs in the news, but what are they? And why are sports fans going nuts for them? Here’s everything you need to know about NFTs.
What Does NFT Stand For?
Non-fungible token. Fungible assets are things that can be exchanged for identical things. If I lose a loonie you gave me to buy ice cream, I can still buy ice cream with a loonie of my own—or any loonie. They’re exchangeable, ergo they’re fungible.
Something non-fungible means it can’t be exchanged. If I have a rare hockey card, that’s a non-fungible item in that it isn’t easily valued or exchanged.
So, a non-fungible token is a one-of-a-kind token.
But What Do NFTs Do?
Up until NFTs, it was hard to say or prove who owned a digital thing, like a picture or video. Who owns this Nyan Cat gif, given that it can be reposted everywhere? Technically, the creator owns it, but to prove it he’d need to go to a court of law.
NFTs make owning digital things easier. Basically, you can buy a non-fungible token that says you own the Nyan Cat gif, and the software that powers NFTs proves that you’re the actual owner.
How Do NFTs Work?
Blockchain. The same technology that makes cryptocurrency possible also makes NFTs possible. Blockchain can verify your token against the public ledger of tokens.
So Are NFTs Like Crypto?
No. Though NFTs use blockchain, they are not cryptocurrency. They are investments, though.
The NBA thinks so, and it looks like other sports leagues will follow suit. In fact, Matt Tkachuk of the Calgary Flames became the first NHLer to sell an NFT, which raised more than twenty grand for a children’s hospital. Presumably, once more players (or the league itself) start offing more NFTs, there will be cheaper ones on the market.
Basically, if you want one more way of owning sports stuff, you can buy an NFT and add digital sports stuff to your collection of sports cards, posters, and Funko Pops. The difference is that NFTs are digital, easy to prove that they’re yours, and very hot right now.