Money Rehab with Nicole Lapin - WTF are NFTs?

Episode Date: April 13, 2021

Nicole heads to the streets to discuss NFTs, Blockchain, and why everyone’s talking about digital art collecting. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Nicole Lappin. So by now you've probably heard about NFTs, right? Maybe you've seen it on social media or heard your friends talk about it, and you vaguely know that it has something to do with cryptocurrency or art, or maybe it has something to do with grimes or digital cat photos or something, if you're feeling stumped, you are not alone. I hit the streets to do an unofficial survey asking people if they knew WTF is an NFT. And here's what they said. Okay, so I was just talking about this and I'm very confused about them. Non-fundable

token, right? It's like Bitcoin, but there's only one of them. And I know some guy named Weeble or Zeeble or Meeble just made $69 million selling one. So my understanding of NFTs, Persef stands for non-fungible token, which I don't understand what a fungible token is, so I don't know what a non-fungible token is. Fungible? Wait, what? There's some sort of, like, certification of, like, a digital proof of, like, a piece of artwork that it's like one of a kind. Somebody creates like a little meme type of art thingy and then it's like stamped like it's one of a kind.

It's like the original artwork as opposed to like a meme. I think that it's related to digital art. opposed to like a meme. I think that it's related to digital art. And I don't really understand if it's like a physical item or if it's just like a certificate of some sort. Like I want to say that it's the Bitcoin of the art world. So I guess it's like protected by blockchain, which also I don't fully understand.

So this is just magic to me. which also I don't fully understand, so this is just magic to me. Well, that is close-ish and accurate adjacent, but also kind of hilarious. So let me try to clear some of this up. First things first, NFT. It stands for non-fungible token. I know that probably doesn't help because that's confusing, I know. So now let me break that down. Non-fungible more or less means that it's unique and can't be replaced with something else. In contrast, fungible would be something you could trade for something else that would have the exact same value. So money or bitcoins, those are all fungible because if I gave you 10 bucks and then you gave me 10 bucks back, we have the same thing. But if you gave me a signed Babe Ruth baseball card and I gave you a signed Britney Spears poster,

we wouldn't have the same thing because those items are non-fungible. Next, the token part. Those items are non-fungible. Next, the token part. WTF is a token. That has to do with the digital nature of this asset. Yes, it lives on the blockchain. And because this episode is pretty much going to be the nesting doll of financial definitions, let's talk about what the blockchain is. It's a digital database.

Blockchain is a type of technology that's used by cryptocurrencies, but it's not a currency itself. It's the record keeping system behind all of that. The name comes from the way it digitally stores information. So the blocks would be individual transactions or records that are strung together on a single list called the chain. It takes a bunch of computing power to make sure that each block is legit before adding it to this long-ass chain so the chain is never broken. You can't go back and tinker with the blocks once they've been put there. It's like the world's longest game of Jenga. We most commonly use blockchain these days to refer to digital currencies like Bitcoin, but it can store pretty much anything, signatures or intellectual property. We're just talking about the technology here, folks. Right now, NFTs are part of the Ethereum blockchain,

although others are starting their own. So what the fuck is Ethereum? Ethereum coins are like Bitcoin in that they are cryptocurrency, but it would be like we're talking about dollars and euros. They're different kinds. NFTs are different from the Ethereum coins, which are fungible, remember? Because they hold more information that, you guessed it, are non-fungible and unique. Anything digital can be an NFT. Digital art, your tweet, music. Anything can be an NFT, but a lot of current excitement is around art specifically.

So let's double click on that. Someone paid $390,000 for a 50-second video of Grimes and $6.6 million for a 60-second video by digital artist Beeple. And there was also a Gucci ghost GIF that sold for $3,600 and is now reselling for $16,300. Some think of this as the future of art collecting. It does give creators another platform to sell their stuff. And there is a feature that every time it gets resold, the creator gets a cut. On the buying side, it gives you basic usage rights like bragging rights or posting about it and a blockchain entry that you have to show for. But here's where it gets a little weird. Well, weirder. It can be copied. Like you could literally have a copy of that

Beeple video that sold for six million bucks. So you're thinking, well, what's the point? Well, it's kind of like actual art. Like, there could be a bunch of replicas of a Monet painting, but there's only one original. But because the barrier to injury is so low, like, we could sell a tweet, some are thinking that this is also kind of like a Pokemon collecting thing and not so much a fine art collecting thing only, because you can literally post anything right now as an NFT. And if someone wants to buy it, cool. You might be thinking, yes, absolutely. Where can I do that? There are a whole bunch of platforms, OpenSea, Rarible, Nifty Gateway. The tweet one, if you're so interested, is valuables by cent.

Cent, as in dollars and cents. But remember, if you sell your tweet, you don't actually get any cents or dollars. You get cryptocurrency, which is on the blockchain. And now, in the same way as if you give a mouse a cookie, you know what happens next. cookie, you know what happens next. And since I always try to put my money where my mouth is, I am making my very own special money rehab NFT. If you are stoked about this, you can learn more about where you can bid on our Instagram money rehab show. And for today's tip, you can take straight to the bank or to your Coinbase account. Go ahead, make your own NFT. You never know, you could be the next Grimes.

Get after it. And hey, having some cryptocurrency, of course, with the caveat from Mama Money Rehab, put it safely in a digital wallet is better than no cryptocurrency at all. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikadur and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.