You may have seen the term NFT in the news lately. Some NFTs have sold for tens of millions of dollars even though they exist only as digital files. NFT stands for non-fungible token. NFTs are digital files encrypted with a digital signature that proves it’s authentic. This works much the same way Bitcoin and other cryptocurrencies operate.
Some NFTs are works of art, others are digital audio files, Twitter CEO Jack Dorsey’s first Tweet sold for close to $3 million dollars.
An NFT of this popular meme raked in nearly half a million dollars for the now-grown-up girl pictured in it and her father, who originally snapped the photo 17 years ago.
So why are people shelling out big bucks for something they can’t hold and that can be easily duplicated? People like to collect things and only the encrypted file is considered authentic. You could take a picture of a Monet but that wouldn’t be the original work of art.
The real question is, can an authenticated digital file retain value the way the first edition of a book does? Or are we looking at something akin to the Beanie Baby Bubble? As with any other collectible, only time will tell.