NFTs and crypto explained

It’s got people across the world obsessed, giving regular Joe’s a little glimpse into the world we so vividly saw depicted by Leonardo Dicaprio in The Wolf of Wall Street: that is the world of crypto. But what exactly is it? Why are people so obsessed with it? And can you actually make money like the hottest of Wall Street traders? Or is the whole thing an overhyped scam? And where even to begin with NFTs…? We break down the basics so you can decide for yourself if you want to take the plunge and start scouring Reddit for tips on the next new buzzword ripe for investment.

What is crypto?

Crypto or cryptocurrency is a new(ish) form of digital or virtual currency. It is based on a form of technology called blockchain. What that means is, in contrast to traditional currency and payment transactions that are held and processed by central banks, cryptocurrency and its transactions are stored across a decentralised network of thousands of computers across different locations. By circumventing authorities such as governments and banks, cryptocurrencies are theoretically immune to interference and people can buy, sell or trade securely. As the irreversible transactions are immune to hacking, people’s finances are in some ways more protected. There are also downsides though, such as their volatility and the profuse amount of energy required for crypto mining, the complex process through which new currency enters circulation. The most common is Bitcoin, which has been in circulation for over a decade, and also popular is Ethereum, but there are thousands of others, with new ones being created every day. You can get started with trading on websites like bitcoin prime.

What are NFTs?

NFT stands for non-fungible tokens. It’s an acronym you will have heard bandied about a lot, whether in news headlines or in chatter over a beer in the pub. But it’s a pretty opaque concept unless you know what it’s referring to. Non-fungible tokens are related to crypto in the sense that they are also based on blockchain technology. However, the reason for being called “non-fungible” is, unlike cryptocurrencies, they are unique and cannot be exchanged with an identical one of the same value. Where crypto is a currency, NFTs are goods. Their purpose is to transform digital works of art or collectables into one-of-akin assets easy to trade on the blockchain. This can take the form of GIFs, Tweets, images of physical objects or virtual trading cards, for example. Although this may still sound rather elusive, there are many artists and musicians who have been able to monetise their digital assets using the new technology. To put it into concrete terms, the first-ever NFT artwork sold by Christie’s auction house, a collage of digital artwork images by Beeple, sold for an astonishing $69.3 million, Twitter founder Jack Dorsey’s first-ever tweet sold for a whopping $2.9 million, a 10-year-old “Hyan Cat” GIF sold for $600,000 and a clip of a slam dunk by basketball player LeBron James reached $200,000. Not too shabby, hey? Well if you’re keen to have a further look, check out some of the popular NFT marketplaces such as Nifty Gateway, OpenSea or SuperRare and dip your toe in the NFTs waters.

The editorial unit