Crypto Diary 0003: Non-Fungible What?

Third in a series of diary entries about the blockchain and cryptocurrency by Jess Lander.

One of the biggest buzzwords in the crypto universe is NFT. Even if you haven’t fallen down a crypto rabbit hole like myself, you’ve likely at least heard about NFTs given that major corporations from the NBA to Time Magazine released them this past year.

NFT stands for non-fungible token. Now, there’s a good chance that means absolutely nothing to you and I’ll admit that the first 20 or so times I read that, my eyes completely glazed over.

The easiest way I’ve come to think about NFTs is that they’re one-of-a-kind collectible items that can be sold or traded, like baseball or Pokémon cards, Beanie Babies, or POGs, except they’re digital (images, videos, and audio files).

NFTs come in all shapes and forms: art, music albums, sports highlights, and animated characters like CryptoKitties, Pudgy Penguins, and Bored Apes. Some of these double as games; on CryptoKitties, one of the first NFT collections to really blow up, you can actually breed your cats. There are even pet rock NFTs that have sold for upwards of $100,000. Yes, I’m serious.

When you purchase an NFT, you own the rights to the digital item, and that ownership is recorded on the blockchain, a super-secure digital record of crypto transactions. But there’s a catch: While the purchaser gets undisputed proof of ownership, they don’t get the copyright, which essentially means that pretty much anyone can view or save the file to their computer.

If you’re scratching your head at all of this, you’re not alone. Do people really think a digital pet rock is going to make them happy or rich one day? More importantly, if it does, has the world officially gone sideways? 

Earlier this year, an NFT collage by digital artist Mike Winkelmann, aka Beeple, sold for a whopping $69.3 million at a Christie’s auction! The sale catapulted the NFT to the number three most expensive work of art auctioned by a living artist! I’m just over here struggling to understand why people are spending thousands and sometimes millions of dollars on digital artwork that can’t even be displayed in their homes (without spending more money on fancy digital-art players or more TVs).

And what does “ownership” really get you, anyway? A bragging point at a cocktail party? A flex to strangers on Twitter?  

I probably need a psychology degree to grasp it all, but what I’ve come to realize is that the majority of my friends dabbling in NFTs aren’t doing it for the money (and they’re not dropping a ton of money on them either). They’re doing it because it’s kind of fun. They’re bored or understandably looking for something lighthearted to break up all of the doom and gloom that surrounds us these days. And what better way than to connect and engage with a community of other weird humans that get just as excited about breeding inanimate cats?