What is this newsletter about?
This newsletter curates news articles about the NFT market and provides short commentary about these articles and how they reflect trends within the NFT market.
The intended audience is a mainstream, non-technical one.
If you are deep in the NFT weeds, or even the broader crypto/blockchain ecosystem, then a lot of the content in this newsletter will be of little use or interest to you.
Further, when this newsletter comments on technical subjects it will do so at a very high level and so will elide a lot of complexity and details.
No advice about which NFT to buy or sell or avoid, or which NFT platform to use or not use or avoid, will be given, nor will requests for information about either of these things be acknowledged.
Similarly, no technical support for NFTs, NFT platforms, or cryptocurrency and blockchain technology more broadly, will be given through this newsletter, and requests for such support will not be acknowledged.
The NFT industry, and the crypto/blockchain industry more broadly, moves extremely quickly and a lot of information becomes quickly outdated; therefore, always consider the date of a post or article before acting upon anything you read.
The author of this newsletter, Dave Friedman, is not employed by any NFT platform or any other cryptocurrency/blockchain company.
What are NFTs?
This is a basic, high level introduction to NFTs. As such it elides a lot of detail. There is a huge amount of information available on the internet about NFTs, and those looking for a more in depth discussion than can be found here would do well to hit Google.
To understand what NFTs are, we first have to discuss fungibility and how it differs from non-fungibility. And we can do that without even discussing NFTs, blockchain, or cryptocurrencies.
Fungibility is the characteristic of being interchangeable. It is relevant to many commodities markets: one bushel of wheat is interchangeable with another, an ounce of gold of a given purity is interchangeable with any other ounce of gold of a given purity, a barrel of oil is interchangeable with any other barrel of oil.
Non-fungibility refers to things which are not interchangeable. Houses are not fungible. Even if you exchange your house for another with the same dimensions, the two houses (and the land on which they are situated) will vary somewhat, and be accorded different values by the market. Even cars of the same vintage and model are non-fungible: Your 1992 Toyota Camry may have been better-maintained than mine, and so have a different value on the market.
Given these definitions, let’s look at blockchains and the digital assets that reside on them. Cryptocurrencies are fungible: your bitcoin can be exchanged with my bitcoin, your ether can be exchanged with my ether, etc. Each bitcoin and each ether are exchangeable with other bitcoin or ether. Non-fungible tokens, however, are unique digital assets and are therefore not interchangeable. My NFT is different from yours.
NFTs can represent various digital files, including videos, audio, photos, etc. A subtle point: the owner of the NFT owns proof of ownership of the digital asset, but she does not control access to the digital asset tied to the NFT. In practice this means that if you own an NFT tied to, say a JPEG, anyone else with an internet connection can access that JPEG. What, exactly, this implies for the long-term value of any given NFT, or indeed the general viability of NFTs, is at present uncertain.