by Calum Morrison
i What they are
ii The numbers
iii The anatomy
iv The landscape
v A look forward
In October 2020, Pablo Rodriguez-Fraile spent $67,000 on a ten-second motion graphic of Donald Trump that he could have watched or replicated for free online.
Within six months he sold the piece for $6.6m. He did so with the possibilities created from non-fungible tokens.
Non-fungible refers to things that can’t be exchanged on a like-for-like basis and are individually unique. Humans are non-fungible, gold, dollars, and Bitcoin, are fungible.
People find it hard to wrap their heads around exclusive digital ownership of something that can be easily and endlessly duplicated - like a meme, tweet, or video clip.
The NFT of the first-ever tweet was sold for $2.9m and Tim Bernard Lee auctioned off the original piece of code used in the creation of The Internet for $5.4m.
Non-fungible tokens are a way of attaching a unique digital signature that acts as a certificate of ownership to various tangible and intangible objects on a blockchain.
Cryptographic algorithms are used to tokenize the digital asset, or the digital twin of a physical asset, and validate its origins as unique.
By creating real-world scarcity for digital objects we create value.
As with crypto, a record of who owns what is stored on a shared ledger known as a blockchain. Once it’s in stone, those records can’t be forged because the ledger is validated by the consensus of thousands of distributed computers around the world.
People have been playing around with the concept [since the mention of Coloured Coins on Bitcoin back in 2013, but the emergence of NFTs has spiralled beyond anything imaginable in the last year.](https://medium.com/@Andrew.Steinwold/the-history-of-non-fungible- tokens- nfts-f362ca57ae10#:~:text=One%20could%20argue%20that%20Colored,Property)
They dramatically shift the value and exchange of data, items, and IP across mass markets.
The NFT tsunami has been many years in the making and stretches much further back than symposiums on Coloured Coins.
It answers a Cartesian argument of original, exclusive, and unique ownership of assets in the digital universe. A universe we now spend more time in than our physical reality.