The token is unique and native to the blockchain, equivalent to a digital certificate of ownership. Popping the hood on popular NFTs like Cryptokitties, NBA Top Shot or the Beeple compilation art piece that sold for $69M will reveal the same two components: (1) a blockchain token, and (2) the media associated with the token (image, audio, video) that lives outside the blockchain (“off-chain”). If 1 million cats were created, there are 1 million non-fungible tokens on the blockchain. You can resell them, breed them, dress them up, even race them. Cryptokitties are virtual cats, each one unique and memorialized with a token on the Ethereum blockchain. The first mainstream example of NFTs was Cryptokitties in 2017. Think art, collectibles, intellectual property, real estate, credentials and identity. While fungible tokens are the vehicles for representing cryptocurrencies on blockchains, non-fungible tokens are the vehicles for representing unique, one-of-a-kind things. Something that is non-fungible implies it is…not…mutually interchangeable. One bitcoin is identical to another bitcoin. Cryptocurrencies like Bitcoin and Ethereum are fungible too. For this reason, we say dollars are fungible (pronounced fun-jibble). Let’s zoom in…įungibility…which is not a word most of us learned in school, is usually associated with things like currencies, where each dollar is mutually interchangeable with another dollar. Some of the most popular NFTs are selling for millions of dollars, but what are buyers actually getting? Do they know?Īll that and more in today’s issue. NFTs, or non-fungible tokens, have found their way into mainstream pop culture recently as artists, musicians and media companies have leveraged the technology to monetize IP and re-engage with fans after an involuntary 12-month hiatus from live and group events.Īs someone who majored in music business in college, I’m thrilled to see a musician’s ability to monetize their work untether from the traditional record label/live performance model.Īs someone who also went to law school, I’m keenly interested in the rights associated with NFTs.
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