NFTs and Digital Assets
Non-fungible tokens and the evolution of digital ownership
What Makes an NFT?
NFTs (Non-Fungible Tokens) represent unique digital items on the blockchain. Unlike cryptocurrencies where each coin is interchangeable, each NFT is distinct and can represent ownership of something specific.
The technology enables verifiable digital scarcity and provenance tracking—knowing who created something, who owned it, and its complete transaction history.
Think of it like a certificate of authenticity
NFT Use Cases
Digital art: Artists can sell directly to collectors, receive royalties on secondary sales (when supported), and prove authenticity.
Gaming: In-game items as NFTs can be owned, traded, and potentially used across games. Still largely experimental.
Collectibles: Profile pictures (PFPs), trading cards, sports memorabilia. Value driven by community and scarcity.
Membership and access: NFTs as tickets or membership cards for communities, events, or exclusive content.
Real-world assets: Tokenizing physical items— still early but exploring real estate, luxury goods, etc.
The NFT Market
Marketplaces: OpenSea, Blur, and others facilitate buying, selling, and discovering NFTs. Marketplaces compete on fees, features, and creator tools.
Volatility: NFT values are extremely volatile. The 2021-2022 boom saw massive speculation followed by significant decline. Many NFTs become worthless.
Royalties: Creators can set royalties on secondary sales, but enforcement varies by marketplace. This model is increasingly being bypassed.
Why NFTs Matter
- Enable digital scarcity and provable ownership
- New models for creators to monetize and connect with audiences
- Foundation for digital identity and reputation systems
- Experimenting with new ownership and community models
NFT Risks
- •Highly speculative—most NFTs lose value or become worthless
- •The image/file isn't on-chain—often stored externally and can disappear
- •Wash trading inflates apparent market activity
- •Copyright and IP issues—owning an NFT rarely means owning rights
- •Rug pulls and scam projects are common
Key Takeaways
- NFTs represent unique, non-interchangeable digital items
- Primary innovation is verifiable digital ownership and provenance
- Use cases beyond art: gaming, membership, real-world assets
- Market is highly speculative with significant risk
- The NFT points to data—understand where the actual content lives