For the past few months people have been mesmerized by NFTs. I’ve also struggled with understanding what they’re all about. Finally, thanks to a great essay by Jack Rusher, I’m a bit more enlightened on the topic.
I’m not going to try to explain what an NFT is. Suffice it to say that it stands for non-fungible token and it’s built on top of blockchains like Etherium or Flow. Some people like to call them “Nifties”.
As the name implies, each NFT can represent a unique digital item (e.g. a video, photo, tweet, or whatever can be stored digitally as a file) and thus they aren’t interchangeable. That’s the main difference to crypto currencies, because you can always swap a bitcoin for another bitcoin (as they are “fungible”), whereas each NFT is “one of a kind” (hence the name “non-fungible”).
Thanks to John Gruber’s Daring Fireball, I stumbled across the essay by Jack Rusher mentioned earlier. Rusher compares NFTs to signatures in the real world, concluding that:
An NFT is a mechanism by which an artist can publicly attach their cryptographic signature to a digital work of art. In other words, it is a technology that supports in the context of digital arts the same kinds of signed editions that have existed in fine art photography for most of a century.
Here’s where Rusher really delivers his point:
When we hear someone say something like “why would I buy it when I could just screenshot the PNG?”, the questioner has misidentified what, exactly, is for sale. An NFT does not represent the PNG, but rather the signature of the artist in the context of that PNG.
I fully agree with Gruber when he applauds Rusher’s comparison: “To say that [Rusher’s] explanation made a lightbulb turn on in my head is an understatement”.
For me too the explanation makes perfect sense. In fact, it’s one of the best explanations of NFTs I’ve found so far.
You can make thousands of copies of a photograph, be it printed or digital. In both cases the cost is low, and one could argue that in the case of a digital photo, the cost is essentially zero. But you can’t copy a signature, be it a physical or cryptographical one, and for some collectors that has value.
Whether or not I would ever buy a digital collectable, signed and rendered unique by an NFT, is a completely different story.