Non-Fungible Tokens

= "Non-fungible tokens are therefore completely unique expressions of an asset on a blockchain". [1]

Contextual Quote

"a one-pixel differentiator in a JPEG makes that image unique from any other. Dollar bills in your wallet are fungible for one another, but an image of video or song, these are sort of like unique ideas that can come to be represented as unique tokens. So what we're talking about is taking unique digital things, and making them individually ownable on the internet for the first time without any third party. Fungible tokens benefit from blockchains because the technical properties of blockchains force their scarcity, the fixed supply of Bitcoin, well, with NFTs you can reduce that fixed supply to one-on-one."

- Jesse Walden [2]

Discussion

NFT's and value retention

Jesse Walden:

" once it's in your wallet, you can bring it to any third-party application, and so developers can build all kinds of new exciting experiences to attract you to come and bring your stuff there. What I think we might start to see that might resemble royalty or ad-based revenues that you have in Web 2.0 is that you might see applications that pay some portion of the revenue that they're generating back to the NFT holder for the reuse of that asset in the context that they're building. Today that doesn't exist by and large, but I think that's where we may be heading. And what's cool is, all of these new revenue streams or new royalty flows can be programmatically administered in a transparent way. Compare that to the way copyright is administered for music today where it's very opaque and goes through 10 different middlemen, now all of that is transparent and automated. And as a result, hopefully, the creators and IP owners will be able to retain more of the value.

...

Owning the original may not be for everyone. As you said, you're totally fine just listening to the song. But somewhere out there, there's a superfan who really wants to own the original, like this sort of infamous story of Martin Shkreli buying the one of one Wu-Tang album for a million dollars. That's one example. There's also the example of art in museums, anyone can go to the museum and see the painting for free or you can look at a postcard of the painting or look it up in an art book, but someone wants to own the original painting. It's true that physical work is desirable because you can like put it up on your wall or whatever.

But soon, we're going to see experiences that allow you to showcase your collection anywhere on the internet, where you get attribution for being the owner. So that little placard in the museum that shows here's the painting title, here's the owner was contributed by so and so. That's going to be everywhere on the internet. So there's social status involved in being the owner of a popular idea, a popular image, video, or song. And I would argue that the value of an NFT is in fact directly correlated with the number of times the image, the video, the song has been shared. So the more viral it is, the more value there is in owning the original. " (https://joincolossus.com/episodes/5917632/walden-a-primer-on-nfts)