Crypto Decrypted

5The Metaverse, NFTs, and Web 3.0

Keanu Reeves broke out laughing during an interview when asked if he knew about Matrix Resurrection NFTs and the long digital lines of potential buyers crashing the site. The interviewer referred to the demand for tokens that have “digital scarcity,” to which Reeves added, “and can be easily reproduced!”

Many of us shake our heads at some of the surreal, virtual aspects of the digital economy, especially where value is not obvious. We're here to address that, demystify NFTs, Web 3.0, and the metaverse, and explain why they are essential for investors or anyone else to understand.

Despite Keanu's chuckle, NFTs are not reproducible. NFT stands for non‐fungible token, which are digital assets that are provably unique at the code level: only one ever exists. NFTs allow you to buy and sell ownership of unique digital items and keep track of who currently owns them using the blockchain. Bitcoin, and most general crypto assets, are fungible, which means that they can be exchanged and have equal value. Dollars are fungible. Brand‐new pencils are fungible. Anything that can be traded for another thing of the same type that has the same properties and value is fungible. With Bitcoin, each coin is the same and contains the same uses. Every bitcoin is the same as every other, just like a dollar in your wallet is the same as any other dollar. By contrast, NFTs are not interchangeable. No NFT can be reproduced. It's a new data structure that will have a ...