So what’s an NFT, and why do I care?
Lately our firm has been fielding a lot of questions about NFTs. For most, Non-Fungible Tokens (“NFTs”) are digital images being sold on the internet, like today’s version of a baseball card. So if that’s all an NFT is, why should you care? If you were an avid baseball card collector, that would be one reason.
The real truth is that we are just scratching the surface of what an NFT is. Let’s start with the actual definition. Non-Fungible is just a fancy term for something that is unique. As an illustrative comparison, a dollar, or a coin, or a piece of paper, or yes even a crypto currency recorded on a blockchain, are all fungible. An NFT, on the other hand, is very unique, and each NFT’s uniqueness is created and recorded on a blockchain, and each time that NFT is sold or transferred, that change is also recorded on the same blockchain. Its this last part I find the most interesting.
Almost anything can be linked to an NFT (a house, a car, or a really cool pair of original Sky Jordans still in the box), and any change in the ownership, whether a lien, sale, mortgage, loan, or otherwise will also be recorded on that same searchable, and completely secure, blockchain. This creates a limitless opportunity to change the antiquated systems we have had in place for hundreds of years. The best example of this so far is the recording real estate transactions.
Just this month, the U.S. Government Accountability Office (“GAO”) stated that:
“A blockchain might both increase the speed of a title registry system and lower the cost of title insurance by making title registration simpler and more trustworthy.”
How will you our your business involve NFTs in your transactions? Always feel free to reach out should you need any help or advice in the new world of NFTs.