All this news may have left you wondering: what is an NFT, anyhow?

After countless hours of research and discussions (most of which were against my will), I think I know. I also think I’m going to cry.

Okay, let’s start with the basics.

What is an NFT? What does NFT stand for?

Non-fungible token.

That doesn’t make it any clearer.

Right, sorry. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing.

A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. You gave up a Squirtle, and got a 1909 T206 Honus Wagner, which StadiumTalk calls “the Mona Lisa of baseball cards.” (I’ll take their word for it.)

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain, though other blockchains have implemented their own version of NFTs. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also keeps track of who’s holding and trading NFTs.

How do you pronounce NFT?

Almost everyone spells it out, saying “en eff tee.” The brave call them “nefts.” The enlightened have never had the word cross their lips.

What’s worth picking up at the NFT supermarket?

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art. 

You mean, like, people buying my good tweets?

I don’t think anyone can stop you, but that’s not really what I meant. A lot of the conversation is about NFTs as an evolution of fine art collecting, only with digital art.

Could you do a real quick rundown of what the blockchain is?

Well, they’re pretty complex, but the basic idea is that blockchains are a way to store data without having to trust any one company or entity to keep things secure and accurate. There are definitely nuances and exceptions there, which you can read about in our blockchain explainer, but when most people say “blockchain,” that’s the kind of tech they’re talking about.

There’s also... a lot of nuance about whether NFT’s are on the blockchain or not, which we’ll dig into in a bit.

Oooh, foreshadowing.

I know, I feel like a real writer.

So do people really think this will be the future of collecting?

Sorry, I was busy right-clicking on that Beeple video and downloading the same file the person paid millions of dollars for.

Wow, rude. But yeah, that’s the awkward bit. You can copy a digital file as many times as you want, including the art that’s included with an NFT.

But NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original.

No shade to Beeple, but the video isn’t really a Monet.

Whoever got that Monet can actually appreciate it as a physical object. With digital art, a copy is literally as good as the original.

But the flex of owning an original Beeple...

Sales have absolutely slumped since their peak, though like with seemingly everything in crypto there’s always somebody declaring it over and done with right before a big spike. Am I predicting that NFTs are about to make a comeback? Absolutely not, but I’m sure there are plenty of folks in NFT-based communities that are sure they’re still on the gravy train.

Oh no you’re about to talk about the apes aren’t you?

Sure am!

If you haven’t heard about the Bored Ape Yacht Club, it’s one of the most successful NFT projects, with apes (which are procedurally generated and have unique characteristics) selling for millions of dollars. The company behind the series of NFTs has created a spin-off cryptocurrency, broken the blockchain for a few hours with how popular one of their sales was, and even acquired other massive NFT brands. And a reminder: this all happened because people really like saying that they own a picture of a Bored Ape.

People like, for instance, Jimmy Fallon and Paris Hilton, who discussed their apes on TV in a clip that went viral for being soooo uncomfortable.

What’s the point of NFTs?

That really depends on whether you’re an artist or a buyer. 

I’m an artist.

First off: I’m proud of you. Way to go. You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the iMessage App Store? No way.

Also, some NFT marketplaces have a feature where you can make sure you get paid a percentage every time your NFT is sold or changes hands. That makes sure that if your work gets super popular and balloons in value, you’ll see some of that benefit.

I’m a buyer.

One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs (which are way trendier than, like, Telegram stickers). Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.

No, I meant I’m a collector.

Ah, okay, yes. NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit. I feel kind of dirty for talking about that, though.

So every NFT is unique?

In the boring, technical sense that every NFT is a unique token on the blockchain. But while it could be like a van Gogh, where there’s only one definitive actual version, it could also be like a trading card, where there’s 50 or hundreds of numbered copies of the same artwork.

Who would pay hundreds of thousands of dollars for what basically amounts to a trading card?

Well, that’s part of what makes NFTs so messy. Some people treat them like they’re the future of fine art collecting (read: as a playground for the mega-rich), and some people treat them like Pokémon cards (where they’re accessible to normal people but also a playground for the mega-rich). Speaking of Pokémon cards, Logan Paul sold some NFTs relating to a million-dollar box of the—

Please stop. I hate where this is going.

Yeah, he sold NFT video clips, which are just clips from a video you can watch on YouTube anytime you want, for up to $20,000. He also sold NFTs of a Logan Paul Pokémon card.

Who paid $20,000 for a video clip of Logan Paul?!

It would be hilarious if Logan Paul decided to sell 50 more NFTs of the exact same video.

Linkin Park’s Mike Shinoda (who also sold some NFTs that included a song) actually talked about that. It’s totally a thing someone could do if they were, in his words, “an opportunist crooked jerk.” I’m not saying that Logan Paul is that, just that you should be careful who you buy from.

Are NFTs mainstream now?

It depends on what you mean. If you’re asking if, say, my mom owns one, the answer is no.

But we have seen big brands and celebrities like Marvel and Wayne Gretzky launch their own NFTs, which seem to be aimed at more traditional collectors, rather than crypto-enthusiasts. While I don’t think I’d call NFTs “mainstream” in the way that smartphones are mainstream, or Star Wars is mainstream, they do seem to have, at least to some extent, shown some staying power even outside of the cryptosphere.

But what do The Youth think of them?

Ah yes, excellent question. We here at The Verge have an interest in what the next generation is doing, and it certainly does seem like some of them have been experimenting with NFTs. An 18 year-old who goes by the name FEWOCiOUS says that his NFT drops have netted over $17 million — though obviously most haven’t had the same success. The New York Times talked to a few teens in the NFC space, and some said they used NFTs as a way to get used to working on a project with a team, or to just earn some spending money.

Okay, but what does Keanu Reeves think of NFTs?

That moment would make a great NFT.

Someone thought that too, and minted that clip as an NFT. It wasn’t us though! Rampant copyright infringement is an ongoing problem in the space. One of the post popular NFT trading sites estimated that over 80 percent of the artwork minted using its free tool were “plagiarized works, fake collections, and spam.” Which is, you know, not a great look? 

Can I buy this article as an NFT?

No, but technically anything digital could be sold as an NFT (including articles from Quartz and The New York Times, provided you have anywhere from $1,800 to $560,000). deadmau5 has sold digital animated stickers. William Shatner has sold Shatner-themed trading cards (one of which was apparently an X-ray of his teeth).

Gross. Actually, could I buy someone’s teeth as an NFT?

Look? Where? 

There are several marketplaces that have popped up around NFTs, which allow people to buy and sell. These include OpenSea, Rarible, and Grimes’ choice, Nifty Gateway, but there are plenty of others.

I’ve heard there were kittens involved. Tell me about the kittens.

NFTs really became technically possible when the Ethereum blockchain added support for them as part of a new standard. Of course, one of the first uses was a game called CryptoKitties that allowed users to trade and sell virtual kittens. Thank you, internet.

I love kittens.

Arrrrrggggg!

Same. At one point I thought that the kittens would be used in games in a somewhat interesting ways. That glimmer of hope has been decimated by the fact that almost every salesperson in the NFT space promises that their tokens will be part of a game or metaverse.

When real game developers like Ubisoft and the studio behind STALKER have said they’d integrate NFTs into their games... people reacted VERY negatively. The companies have either had to scrap their plans entirely or severely tone down the amount of blockchain stuff in their games.

At least it’s not digital pet rocks... right?

Can I cry on your shoulder?

Only if I can cry on yours.

Could I pull off a museum heist to steal NFTs?

That depends. Part of the allure of blockchain is that it stores a record of each time a transaction takes place, making it harder to steal and flip than, say, a painting hanging in a museum.

Or at least that’s the theory. In reality, many, many people have gotten their NFTs stolen by attackers using a variety of tactics. To be clear, hackers aren’t always playing 5D chess here. For the ever complicated hack of the programs that control the flow of crypto, there’s a case where someone was tricked into signing a transaction they shouldn’t have through run-of-the-mill phishing.

Note: Please don’t steal.

Should I be worried about digital art being around in 500 years?

But wait, doesn’t the fact that they’re on the blockchain make them permanent?

Okay, so this is a whole thing. Technically, yes: when you say NFT you’re referring to an entry on the blockchain. However, the actual media, like the picture, GIF, or flagrant flaunting of copyright law is very rarely actually stored on the blockchain — it’d be too expensive to do that.

Sometimes the media the NFT points to is stored on a cloud service, which isn’t exactly decentralized. Since this has come up as an issue, with people worried that their NFT proving they watched the Lions lose could go poof if one company goes under or changes their URL scheme, many in the NFT space have been turning to decentralized storage solutions like the InterPlanetary File System that use torrent-like technology. It’s not bulletproof, but it’s better than having your million-dollar JPG stored on Google Photos.

Torrent-like? So people are pirating NFTs?

No... Well, kinda, but hold that thought. The idea behind IPFS is that files are stored on a peer-to-peer network, meaning they could be stored on several computers at once. Files are given an identifier, and when a computer goes to load the file it asks the IPFS network to give it the file with that ID. Any of the computers storing it can say, “Oh, here it is!”

When you make an NFT, the content link is baked into the token. If that link goes to IPFS, it’ll be pointing to something that’s more permanent than, say, an image on a regular server.

In theory, anyways. Of course, distributed does not equal perfect. Experts have warned that files could still end up on a single computer, and could be lost in the case of a hard drive crash.

Okay, so what’s that you said about pirating?

So someone created this site called The NFT Bay as a sort of art project, where they put up a torrent pointing to a 19TB ZIP file, which they said included every NFT on the Ethereum and Solana blockchains. There’s some doubt about whether was actually a treasure trove of NFTs (if such a thing could be referred to as “treasure”), but in theory it’s actually possible to scan the blockchain to find every record of an NFT being minted, and download the media it links to.

Real or not, it was an incredible piece of performance art, sparking a conversation (okay, closer to a flame war) about the right-clicker mindset.

Sorry, what on Earth is a right-clicker mindset?

Ah, sorry. “Right clicker” is sort of a joking derisive term used by NFT boosters to deride people who just don’t get it. The thought is that you’re completely missing the point if you think that just downloading (or pirating) a JPEG will actually get you the valuable part of an NFT. 

Has anyone ever had their feelings hurt when someone tells them they have a right click mindset? Probably not, but their eyes may get a little sore from rolling so hard. 

I want to maximize my blockchain use. Can I buy NFTs with cryptocurrencies?

Yes. Probably. A lot of the marketplaces accept Ethereum. But technically, anyone can sell an NFT, and they could ask for whatever currency they want.

Will trading my Logan Paul NFTs contribute to global warming and melt Greenland?

Can I build an underground art cave / bunker to store my NFTs?

Well, like cryptocurrencies, NFTs are stored in digital wallets (though it is worth noting that the wallet does specifically have to be NFT-compatible). You could always put the wallet on a computer in an underground bunker, though.

What if I wanted to watch a TV show that’s somehow related to NFTs?

Believe it or not, you have options! Steve Aoki is working on a show based on a character from a previous NFT drop, called Dominion X. The show’s site says that it’ll be an episodic series launched on the blockchain (the first short video is on OpenSea), and there are hundreds of NFTs already associated with the show.

There’s also a show called Stoner Cats (yes, it’s about cats that get high, and yes it stars Mila Kunis, Chris Rock, and Jane Fonda), which uses NFTs as a sort of ticket system. Currently, there’s only one episode available, but a Stoner Cat NFT (which, of course, is called a TOKEn) is required to watch it.

Random question: what’s an NFT party like?

Are you tired of typing “NFT”?

Yes.

This story was first published March 3rd, 2021. It has been updated to reflect new developments in NFTs.