Catching Up to Crypto

CHAPTER 16Non‐Fungible Tokens (NFTs)

So far I've talked about a variety of crypto assets. And though many of these assets have had different properties or utilities, and served different use cases, all of them had one thing in common: fungibility. You might remember this term basically means that all the units in a particular asset are identical and interchangeable, like dollars or Bitcoin. Not all assets are fungible – some of them are unique. For example, stocks and real estate are common examples of nonfungible assets. A one‐of‐a‐kind Bugatti or a Basquiat painting are nonfungible assets as well. In crypto, nonfungible assets are called “Non‐Fungible Tokens,” or NFTs. (We need to come up with a better name for this if we want to achieve mass adoption.) NFTs can be art, collectibles, membership passes, keys, digital identification, certifications, and more.

It's hard for many people to imagine how real‐world assets can fit into the digital world of blockchain, but that's what they used to say about money too. Stock trading is already mostly digital on the surface, but under the hood the system runs on outdated technology, and could really benefit from a blockchain upgrade. As for the idea of reducing real estate and cars to tokens, it's not the actual items that get into the blockchain but the titles, deeds, and proof of ownership that are currently on paper and in the centralized servers of local, state, and federal governments. Ownership of these assets can be proven and ...