The term NFT has been in the news a lot lately, but just what is it? NFT is short for non-fungible token—which may not help. Fungible items are commodities that have no difference among them, like copies of a mass-market printed book or pork bellies of a particular grade. NFTs use a blockchain ledger, similar to the one that powers Bitcoin, to digitally sign pieces of digital art, like images, short videos, and songs. That signature makes each one unique, allowing them to have their ownership irrevocably transferred or resold in a way that can be publicly and cryptographically verified. The Verge has published an amusing explainer to help you wrap your head around the idea.
One of the non-intuitive aspects of NFTs is that they don’t work as a form of digital rights management, nor do they have to include any copyright or rights of reproduction or distribution! Why spend $16,000 (or more!) on this Gucci Ghost animation when you can Control-click it and save it to your Mac? The perceived value for which buyers are paying big money lies in the bragging rights surrounding owning what backers of the approach claim is the “original,” unique copy of that work of art.
It’s easy to dismiss NFTs as a bit of Internet madness akin to the GameStop short squeeze, but they do offer a real benefit for artists. That’s because artists can set it so when the NFT is resold, the artist also gets a cut. As a piece of art is sold and resold, it often increases in value, particularly if the artist has become better known in the meantime, and it has long seemed unfair that artists don’t get to share in that appreciation. In the end, the Internet has made it increasingly challenging for artists to make a living from their art, and NFTs might be an answer to that conundrum.