(noun) acronym for non-fungable sign, which creates a clear identifier for a given asset
Any innovation whose name includes the term “fungible” can hardly be expected to attract much non-geek attention. And yet NFTs have achieved exactly that this year.
Many were confused about the new technology. The explanations that emerged offered analogies with, for example, certificates of authenticity or baseball cards. But, most literally, an NFT is tradable code. That code is attached to metadata, such as a name, image or description. Once purchased, it will be indelibly registered on your own digital ID. You own the code in a sense.
NFTs are confused because they are abstract. But the sums they pick up are very concrete. Buyers have poured $ 27 billion into the NFT market in 2021 over games, art, tweets and more. Digital artist Beeple’s $ 69 million auction of “Everyday: the first 5000 days”Rattles thoughts in March. The work, a colorful collage of the artist’s other creations, was one of the highest-grossing sales for a living artist.
As the money flowed, the critics pulled together. Why do they pay for a free downloadable digital image, they wondered. NFT supporters hit back and tarnish their opponents “right clickers” stunned by the distinction between owning an original and copying a facsimile. Taking an NFT screenshot is like taking a selfie with someone else’s Maserati, they argued. Status comes from privileged ownership, not spectacle.
Staid Finance has rushed to classify NFTs as just the latest speculative asset class. True enough: hype overwhelmed complaints that the technology was clumsy, energy-intensive and poorly future-proof. The outrageous prices stood in the way of mass adoption, among other things.
But the need for digital ownership tools is growing. Physical and virtual life, far from merging, differ. Just like our most valuable physical possessions, our digital goods will require deeds. If NFTs are not the future, it could still lead us to do so.