A couple of weeks ago we had a brief discussion here about Trump's latest grift - NFT Trading Cards of himself, or more specifically, his head photoshopped onto badly drawn cartoon characters. Predictably, a certain Trump apologist attempted to explain why this was a brilliant idea, providing all sorts of figures about how big a business this is. Well, I suppose so - if you have an audience of stupid people, anything you can do to separate them from their money could be called brilliant. As to how big a business, I have three letters to rebut with: FTX.
So, what exactly is an NFT? Without getting into the weeds about blockchains, how they work, and how they are used with NFTs, here's a simple explanation.
NFT stands for non-fungible token, which is a fancy way of saying something that can't be reproduced. For example, there is only one physical painting of the Mona Lisa and there will never be another one by the same artist. There may be copies made, but there is only one original and its value is MUCH greater than that of any copy.
NFTs tend to be digital art, which means that there is an original of the art stored somewhere on the Internet. When you buy an NFT, you don't buy the art itself, you buy the ability to access it. Basically, you are not buying something you can touch and feel, you're buying instructions about how to look at the original art. In some cases, you may get a limited license to use the art for commercial purposes, but in most cases you don't.
So what happens when you buy one of these things? The simplest example of how it works that I have seen so far is this:
You go to the grocery store, put some groceries in your cart, and head to the cash register. The cashier rings you up and tells you how much you owe. You give the cashier your money, and she gives you a receipt. The store keeps the groceries.
Do you see the potential problems here, and how easy it would be to lose your grocery investment?
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