NFT Unpack

Now ask yourself: How much physical stuff is yours? Think of every item in your house: books, paintings, photos, CDs, heirlooms, trophies, etc. What’s the market value of all that? As our lives move further online, so will our stuff, and we’ll need some sort of infrastructure that allows us to own it.

Digital belongings exist on the internet, but there aren’t that many types of them. On Fortnite you can acquire guns and outfits. On Reddit you gain badges. Point is: There’s a lot of stuff on the internet, but there isn’t much stuff that’s yours.

NFTs offer digital commerce something the Internet lacks: scarcity and authenticity.

Scarcity and authenticity are powerful, and not always forces for good. Our instinctual craving for scarce sugar and fat has produced an obesity crisis, but we aren’t going to throw out the industrial food system and live off the land. Amidst the scams and bubbles, credible scarcity and authenticity will unlock real value in digital markets.

One of the keys to NFTs will be portability across mediums. A Twitter blue check can’t exist on Instagram, but the NFT equivalent of a Twitter blue check can — and deliver credible authenticity, thanks to that NFT deed. This is the metaverse vision of interoperability that could help make digital belongings feel similar to physical belongings.

NFTs offer the promise of scarcity and authenticity for digital goods. NFTs aren’t the only way to create scarcity and authenticity online — trusted, centralized entities such as banks (and platforms such as Twitter and Apple) do it within their verticals, and blockchain tech is evolving to address myriad environmental and security concerns. So the... See more