Cryptocurrency has been around long enough to grow a vast array of ecosystems. From astounding bull markets that shot Bitcoin to the moon to the rise and fall of altcoins such as Dogecoin, crypto never fails to entertain and perform. Though not always thought of in a positive light, crypto has taught us a lesson: though infantile, it has the potential to change the course of finance indefinitely. Now, a fad sweeps the crypto community and it centers around something known an ‘NFT’.
And while in its infantile years, those most fond of its use band together and develop a group identity, and from there, culture. More often than not, crypto culture has found various forms of expressing within the market. Take for example, Dogecoin. Now, crypto culture is beginning to rear its head, but this time there is a twist. Non-fungible tokens (NFTs) are the latest fad among those within the inner circle of crypto culture. However, many still have never heard about NFTs, and if they have, they have little to no understanding about them. So what exactly are NFTs?
Non-fungible tokens are units of data that are stored on the blockchain and are unique to themselves. In other words, it is representative of something of value, but it cannot be used as easily as money. For example, a movie ticket would be a perfect example of what a NFT is in the real world.
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As of recently, NFTs have been really hot in the crypto community, especially in relation to digital art. Whenever I introduce the concept of NFTs to anyone, I always get the same question: Why would you ever buy digital art if you could just take a screenshot? The answer is simple but unsatisfactory to many: A huge swath of crypto users flat-out like it; it is culturally cool.
Now I know to many that investing in NFTs seems like a bad idea, and it very well might be, but people love them. Since the creation of NFTs in 2014, 174 million has been dumped into them. As of recently, NFTs continue to gain momentum and that count is increasing rapidly.
Everyone knows that most people desire connection, group identity, and/or belonging… NFTs are doing just that for many. Celebrities such as Snoop Dogg, Paris Hilton, Eminem, and many more are proud members of the NFT culture. Often times, digital art is “minted” as a collection, and when someone such as a celebrity buys one in the collection, the prices begin to rise rapidly.
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As of recently, Burberry just became the latest fashion brand to branch into crypto. Taylor Scott from the Bitcoinist writes, “Burberry joins the ranks of Dolce & Gabanna (D&B), Louis Vuitton, Gucci, and more – all within just the past few months.”
If you are still having trouble understanding this, think of it this way: crypto culture expresses itself in peculiar ways. The rise and fall of Dogecoin is a perfect example. Originally created as a joke, Dogecoin rose to crypto prominence with the aid of Elon Musk, or ‘The God of Dogecoin‘ as many have dubbed him. Similarly, many NFTs have no practical value. However, enough people, celebrities, and high-end fashion companies trade and create NFTs to make them hot commodities in the crypto community.
Featured image from BBC, Charts from TradingView.com