You may have seen NFTs make the headlines this year – especially since some have even sold for thousands Millions of dollars.
What are NFTs? How do you work? When you buy one, is your money safe?
Read on for answers to some of your most frequently asked questions.
What are NFTs?
NFT stands for non-fungible token.
Fungible means exchangeable, like normal money. For example, four quarters are worth the same as one dollar bill.
Not fungible means that someone is unique. Non-fungible tokens are digital assets that can be just about anything, including art, video, or music.
When you create something that you want to sell as an NFT, you “shape” it by pushing it onto the blockchain.
What is the blockchain? Basically, it’s a common online ledger. It is also the backbone of the cryptocurrency.
“You can think of the chain as a huge table like a Google Doc. What’s in or in the case of Bitcoin is the amount of money everyone has, ”said Matthew Stephenson – a behavioral economist.
Stephenson said the blockchain is a set of rules about how information is recorded and updated. For example, these protocols prevent someone from simply giving themselves the equivalent of a billion dollars in cryptocurrency.
“If we’re going to share this big table, we can’t allow anyone to update it for better or for worse,” said Stephenson.
These principles also apply to NFTs on the blockchain. Blockchain technology creates shortages of things that exist in digital space, Stephenson said.
“It enables this digital scarcity, which is protected from manipulation over time by the rules. You can get money from it, you can get collectibles from it, and you can get all the other nice things we’d like to make scarce and unique, ”said Stephenson.
How North Texans Buy and Sell NFTs
Stephenson said he worked with Dapper Labs, the company that works with the NBA on Top Shot.
On NBA Top Shot, collectors can buy NBA highlight videos – so-called “moments”. Collectors can buy the moments in packs or individually in the market.
Every moment has a serial number. In general, the rarer the moment, the more valuable it is.
They are basically digital trading cards.
“It’s a moving image instead of a piece of cardboard, but it’s a collectible and there’s only one of them,” said Cash Sirois.
The North Texas sports radio personality also helped launch The Collectible Network, a streaming network dedicated to capturing collectibles.
Sirois believes NFTs will stay here.
“There used to be ticket stubs for the Mavs games, and now it’s all on your phone. We are evolving into a digital world in everything so this is a natural progression for me, ”said Sirois.
Sirois said he started adding Top Shot NFTs to his personal collection earlier this year and that he is not alone.
Dapper Labs said it started the year with 4,796 Top Shot collectors. By April 23, the number should have risen to around 460,000 collectors.
How institutions in North Texas implement NFTs
The Dallas Weekly, a black-owned publication in North Texas, announced it would shape future issues as NFTs.
“We had covers, we had spreads, and these things are basically moments,” said Patrick Washington, CEO and Editor-in-Chief.
“Working at Dallas Weekly has always been about coming up with new products and new digital ways to bring our information and stories to our audience and community. When we started talking, we loved it, ”said Jeremiah Long, director of product at Dallas Weekly.
The publication plans to offer NFTs of select future editions with artist-made covers to support their work and the black press.
“Earning a commission was really a tangible idea, and it’s another source of income for us,” said Jessica Washington, COO and chief financial officer.
“It was a way for us to tap into our local artist market, especially those who I think deserve to be seen and heard and to make hundreds of thousands of dollars for their work. And we could help, ”said Patrick Washington.
“The purpose of the black press is to tell our stories that otherwise would not be told. One of those stories is the presence of our creative side in the visual arts, ”added Washington.
What else is possible?
“I really have no doubt that the entire digitization of society and wealth will stay here,” said Richard Raizes, partner at the blockchain investment firm Plutus21.
The Dallas-based startup grew out of SMU’s entrepreneurship incubator and is focused on investing in blockchain infrastructure.
“The scarcity of something digital is definitely an issue that will stay here. Entrepreneurs and creators from all over the world will take up this scarcity in digital form and create what we cannot imagine today, ”said Hamiz Awan, founder of Plutus21.
Raizes and Awan believe that more assets can be minted in the future. And one day these offers will be as fast on the Internet as they are by e-mail now.
“There is a generation change: the children born today will probably never use cash. I think they will be naturally used to the digital world. To them, the value of something digital is the same as the value of something physical, ”Awan said.
Is your money safe?
NFTs are not regulated like your bank account. There are few protective measures.
Cathlin Tully, an attorney with the FTC’s privacy and identity division, said she was extra careful when promising to get rich quick with NFTs.
“Scams are common in these areas, especially in newer types of markets,” Tully said.
Tully said treat any accounts or digital wallets holding your tokens like bank accounts. Protect your passwords, make sure passwords are difficult and unique, and do not use passwords on other accounts. Tully said when it becomes available, enable multi-factor authentication.
Some NFT consumers tell NBC 5 that they have encountered other complications.
“I’ve probably invested quite a bit in them for about a month, both in terms of money and time. I’d say for the past two months I’ve been waiting to get my money out, ”said AG, who asked us not to use his last name to keep his account private.
AG told NBC 5 Responds that it had spent around $ 10,000 buying NFTs at Top Shot and made some trades, but said it would have to wait weeks to withdraw the funds. He finally got it.
Dapper Labs shared this blog post with NBC 5 Responds to indicate increasing pain and safety and compliance checks. It is said that accounts must be created for at least 45 to 60 days before an account is eligible for withdrawal access – a guideline to prevent chargebacks from bad actors.
“They will indicate that it is a beta. My point is if you can take my money you should be able to give me my money, ”said AG.
All about the money?
At Dallas Weekly, we asked Jessica Washington how she would define a successful Dallas Weekly NFT.
“What makes us successful as a newspaper is our commitment. Do people actually see what we are talking about? Said Washington.
“There’s a lot of negativity on the internet,” said Jeremiah Long – who is also an artist. “The NFT community enforces positivity. They want to see you shine, they want to see your positive things, they want to see you say something happy, they want to see you compliment someone’s art. “
Long’s advice to anyone dealing with NFTs?
“One bad reason to support this is Google: ‘What’s the hottest piece of art?’ and throw your disposable income on it and then hope it turns into a million dollars, “Long said.
“If you’re the kind of person who wants to see an artist that you really love, who does really well over time, that’s a good reason,” Long added.
For Cash Sirois, like his other collectibles, NFTs offer competitive fun.
“Everyone likes a good hunt,” said Sirois. “It reminds me of my childhood. It reminds me of buying a deck of cards and hoping for a Dwight Gooden and not getting it. Then get it sometimes. “
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