I should have seen it coming: At the Thanksgiving dinner table, my 7-year-old niece asked me, “What’s an?”
If you’re into crypto, you’re likely to get asked this too, by a crypto-curious (or more likely crypto-skeptical) family member during the holiday season.
We’ve got a Decrypt Learn guide to NFTs, but “digital assets that contain identifying information recorded in smart contracts” is still too jargony for a 7-year-old, right? And so is the quick definition reminder we use in news stories when we mention NFTs: “blockchain-based ownership deeds tied to digital assets.”
My niece is into “Frozen,” unicorns, L.O.L. Dolls, and Hatchimals. And she certainly knows what the internet is. So I simply told her: Imagine a photo on the internet of one of your Hatchimals. It’s only on the internet, and anyone else can look at it, but you own it, just like you own your Hatchimal.
That explanation seemed to satisfy her. (She was also wearing a Hello Kitty shirt, and I added that she could turn her shirt into an NFT, but that ignores the fact that she doesn’t own copyright to the image, so she really can’t do that—but I left out the legal implications out for now.)
But what about other family members who ask you about NFTs and are not 7 years old? It’s the holiday shopping season, after all—maybe you want to buy someone an NFT.
Here are the pushback questions I get the most about NFTs from crypto skeptics, and how I answer them.
Why would I pay big money for something I can’t display on my wall?
As Mark Cuban wrote last January, value has gone digital. There are tons of virtual things (multimedia, in-game items) that people pay for even though you can’t physically touch them. And as for not being able to display a digital artwork, you certainly could print it out and display it on your wall (though some would say it defeats the point of it being digital art) and in fact, many museums are doing that.
Can’t someone else right-click and save it, or screenshot it, and display it too?
Yup. But that doesn’t mean they own it. Only you, the owner, can trade or sell the NFT. Anyone online can share a photo of a famous painting, that doesn’t mean they own it.
Okay, but what can you do with an NFT, other than re-sell it?
All kinds of things. The more valuable and interesting NFTs have gone way beyond just digital art—they can represent your ticket to an in-person meetup, your access pass to an entire online community, or even your game piece in a metaverse world. Many, many NFTs are going to lose their value—even the most bullish NFT believers agree on this—but the likelihood is that the cream will rise, and the compelling use cases will stick around.
If they still don’t get it, or still conclude NFTs are stupid, they’re not going to change their minds. Better buy them something else.