Non-Fungible Token (NFT):EXPLAINED
By MacKenzy Pierre
The estimated reading time for this post is 168 seconds
Portland, Oregon, Moda Center, the first round of the 2019 NBA Playoffs, Game 7- score-115-115. With about 10 seconds left on the clock, Dame Dollar, aka Damian Lillard, Portland Trailblazer’s point guard, pulled up to shoot, 37 feet from the basket, and sunk a 3-point shot as the clock expired.
The Portland Trailblazer won the game 118-115 to advance to the second round of the NBA playoffs. Lillard finished up the game with 50 points, including 10 three-pointers.
That’s the shot or a moment in basketball history that I would love to own. If my pockets were deep enough, I could own that shot or that scary Lebron James’ Game 6 look in the 2012 NBA Playoffs against my beloved Boston Celtics thanks to non-fungible tokens (NTFs).
What Is a Non-fungible Token?
Using the blockchain, an open ledger system that allows every transaction to be recorded for all to see, content creators can tokenize all aspects of their work, including NBA clips, images, videos, songs, and more. The unique identification code validates their authenticity; in essence, it creates a non-fungible token or NFT. The value of NTF derives from its scarcity and authenticity.
For example, the NBA can attach an NFT to Damian Lillard’s shot and sell it as an authentic digital asset. The NBA launched NBA Top Shot, which facilitates the buying and selling of NBA highlights’ digital collectibles. Every transaction for every token is recorded for all to see. NFT owners don’t get any royalties, but their ownership is indisputable.
What Do Non-Fungible Tokens Mean for Content Creators
NTFs provide content creators another way to monetize their work. A Youtuber, Tik Toker, digital artist, or radio show personality can assign unique identification codes to their video clips or digital arts and auction them. The tokenized works also give their staunch fans a way to show their support. Content creators can use this step-by-step guide to create their own non-fungible tokens.
Should You Invest in NTFs?
A non-fungible token is a highly speculative asset class. Investors need to do their due diligence before putting their money in NFTs. Sport NFTs are like the digital version of sports cards. There are countless shoeboxes of sports cards in attics and basements across the country that are worth nothing.
Unlike precious and industrial metals, NFTs have no storage fees due to their digital nature.
This year alone, digital art by Steve Aoki, Twitter CEO Jack Dorsey’s first tweet, and a Lebron James highlight was sold for $69 million, $2.9 million, and $200,000, respectively. Steve Aoki crypto art title Beeple sold at Christie’s Auction house last month. NFT is a new asset class, but it already has bubble-like characteristics.
Cheap money and yield-seeking investors are propping up new and old asset classes, including special purpose acquisition companies (SPACs), digital currencies (Bitcoin), and non-fungible tokens.
Investors can explore NBA Top Shots for all NBA highlight NFTs and Niftygateway for others.
The Bottom line
A non-fungible token or NFT is a highly speculative asset class. Some might argue that it’s more of a collectible item than an asset class. Any reasonable collector knows that many collectibles don’t age well–Beanie Babies.
If I could afford the Dame Dollard’s shot, I would buy it just so that I could brag to my friends that I own it. Asset appreciation would be icy on the cake.
Senior Accounting & Finance Professional|Lifehacker|Amateur Oenophile
RELATED ARTICLES
What to Do If You Are Underwater on Your Car Loan
The estimated reading time for this post is 386 seconds Being underwater on your car loan can feel like you’re sinking financially, but you’re not alone. According to the Federal Reserve Bank of New York, auto loan balances increased by...
Household Debt Is Rising: What This Means for You
The estimated reading time for this post is 255 seconds In the Federal Reserve Bank of New York’s second quarter of 2024, household debt in the U.S. increased by $109 billion, bringing the total to a staggering $17.80 trillion. If...
1 Comment
Leave Comment
Cancel reply
The Hidden Costs of Financial Procrastination
What to Do If You Are Underwater on Your Car Loan
Household Debt Is Rising: What This Means for You
Gig Economy
American Middle Class / Oct 18, 2024
The Hidden Costs of Financial Procrastination
The estimated reading time for this post is 354 seconds You might think delaying your financial decisions isn’t a big deal. But let me tell you,...
By Article Posted by Staff Contributor
American Middle Class / Oct 17, 2024
What to Do If You Are Underwater on Your Car Loan
The estimated reading time for this post is 386 seconds Being underwater on your car loan can feel like you’re sinking financially, but you’re not alone....
By MacKenzy Pierre
American Middle Class / Oct 16, 2024
Household Debt Is Rising: What This Means for You
The estimated reading time for this post is 255 seconds In the Federal Reserve Bank of New York’s second quarter of 2024, household debt in the...
By FMC Editorial Team
American Middle Class / Oct 15, 2024
A Plan to Grow Your FICO Score
The estimated reading time for this post is 290 seconds You can’t build a solid financial future if your FICO score is holding you back. It’s...
By Article Posted by Staff Contributor
American Middle Class / Oct 14, 2024
Is Bankruptcy the Right Move for You?
The estimated reading time for this post is 439 seconds Bankruptcy is often considered a last resort, a drastic measure for those struggling under the weight...
By Article Posted by Staff Contributor
American Middle Class / Oct 13, 2024
What Matters to Middle-Class Voters
The estimated reading time for this post is 572 seconds Introduction Middle-class voters are the backbone of the American electorate. Their votes decide elections, and their...
By MacKenzy Pierre
American Middle Class / Oct 08, 2024
Jumbo Residential Mortgages: Your Jumbo Mortgage Guide
The estimated reading time for this post is 362 seconds If you’ve been looking at buying a luxury home or property in a high-cost area, you’ve...
By MacKenzy Pierre
American Middle Class / Oct 06, 2024
Does Paying Off Collections Improve Your Credit Score? Here’s What You Need to Know
The estimated reading time for this post is 170 seconds The answer to whether paying off collections will improve your credit score is: it depends. If...
By MacKenzy Pierre
American Middle Class / Oct 05, 2024
How to Remove Late Payments from Your Credit Report: Practical Steps to Reclaim Your Score
The estimated reading time for this post is 263 seconds Late payments are the kryptonite of a good credit score, and too many of you have...
By MacKenzy Pierre
American Middle Class / Oct 03, 2024
Tax Loss Harvesting Can Transform Market Losses Into Tax Savings for Investors Like You: How to Make This Strategy Work for You
The estimated reading time for this post is 382 seconds If you’ve been investing for a while, you’ve probably experienced some market losses. It’s not something...
By MacKenzy Pierre
Latest Reviews
American Middle Class / Oct 18, 2024
The Hidden Costs of Financial Procrastination
The estimated reading time for this post is 354 seconds You might think delaying your...
American Middle Class / Oct 17, 2024
What to Do If You Are Underwater on Your Car Loan
The estimated reading time for this post is 386 seconds Being underwater on your car...
American Middle Class / Oct 16, 2024
Household Debt Is Rising: What This Means for You
The estimated reading time for this post is 255 seconds In the Federal Reserve Bank...
Pingback: Build Wealth with Boring Investments - Stock News