How Do I Talk NFTs With My Family?
Can you already feel the stress of going to Thanksgiving dinner knowing that you’ll have to talk about NFTs?
Your crotchety Aunt Karen is sure to pester you about the illegitimacy of cryptocurrencies and blockchains. Your grandpa Ted will call it all money laundering. And your Wall Street Bro cousin is likely to scream “Beanie Babies” and “it’s all a fad.”
If you’re wrestling with the concerns of how to address these issues, don’t worry, we’ve got you covered.
Below we've provided answers to the questions your family is sure to ask you about NFTs.
Want to print it out and send it to a friend? Download our full guide including the NSFW answers for when you've had enough!
What the hell is an NFT?
NFT stands for Non-Fungible Token. This is basically a fancy way to describe something that is unique. You know what's not unique? The U.S. dollar. We call the dollar fungible because each dollar is exchangeable for another dollar, regardless of serial number or print date.
Our precious family heirlooms though, those are unique. Would you trade grandma's wedding ring for any other wedding ring? No! Because it's not the same one!
The original ring is a unique item that cannot be replicated or substituted for.
Non-fungible tokens are merely digital manifestations of this, bits of data that can now be certifiably unique and authentic thanks to the transparency of blockchain technology.
Before NFTs, it was not possible to authenticate and verify digital items as originals. Now, you can own something on the internet with the data to prove it!
Can’t I just right-click, save it?
You can right-click save an NFT. Just like you can right-click save an image of the Mona Lisa, or The Starry Night.
But saving a .png file of an NFT does not mean it will hold any significant value. In both cases you have a digital replica of some other original item.
So while you can save a picture of the Mona Lisa, or a Cool Cat NFT, without the "Certificate of Authenticity," good luck selling it.
In the case of NFTs, authenticity can be verified thanks to the transparency of the public ledger. Each and every transaction is recorded and stored on the blockchain, visible to everyone.
This means the transaction details of any item can be traced back to its creation. No counterfeiting problems here.
Why is it worth so much? It's just a cat picture?
"It's only worth what someone will pay for it."
An oft-used cliche, but the truth.
As silly as it may seem, a group of people have prescribed a value to the historical provenance of NFTs like CryptoPunks or to the brand power of the Bored Ape Yacht Club. This isn't any different than the way grandpa values old Coca-Cola memorabilia and antique milk jugs.
You should check out the Lucky Trader Case for Caring if you want to know why collecting digital items may seem so appealing to people.
Ok, but this is all basically money laundering, right?
No......it is not basically money laundering.
Blockchains are inherently transparent. Every transaction is recorded, stored, and visible by the public.
It seems pretty dumb to money launder in plain sight on a public record. The blockchain provides a digital "paper trail" from your purchase back to the source.
If you're looking to launder money, you may want to stick to cash.
Beanie Babies were big too...
It's true, Beanie Babies had their run. And while NFTs may be experiencing a similar financial frenzy, it's silly to suspect they will completely disappear.
Hype cycles are typical for emerging technologies. Prices can't always go up, but does this mean NFTs are going away? Of course not.
Do you think Facebook , err...Meta, or CBS, or Adidas would be talking NFTs if they were a short-term fad?
Aren’t NFTs bad for the environment?
NFTs and blockchains do require energy, but in the same way that other technologies and infrastructures require energy.
Lots of people are working diligently to improve efficiencies for the betterment of users and the environment.
For example, have you heard about ETH moving to proof-of-stake? This Forbes article suggests that this should require far less energy than other blockchain consensus mechanisms like proof-of-work.
Ok...but which NFT do I buy?
Whichever NFT interests you most!
There is so much to explore.... works of digital art, fun collectibles, avatar projects for your digital identity, digital horses, chickens, and snails, or maybe even Metaverse land.
It is important to know though that NFTs are a highly speculative asset class. You should never ever invest or spend money that you are not willing to lose.
Where can I learn more?
It's scary I get it. The tech is brand new and there is a steep learning curve.
But Lucky Trader is making it easier to learn and engage with Web 3.0 and NFTs.
Disclaimer: Lucky Trader is not a registered investment advisor. You understand that the service is furnished for your personal noncommercial, information, purpose only. No mention of an NFT in the service constitutes as a recommendation to buy, sell, or hold that or any other NFT. Nothing within the service shall, or is intended to, constitute financial, legal, accounting, or tax advice. Any decision that you make to buy, sell, or hold an NFT should be based on an assessment of your risks in consultation with your personal advisers.