EXPLAINER: What's this craze for 'NFTs' all about, anyway?

This undated photo released by Christie's on Thursday, March 11, 2021 shows a digital collage titled Everydays: The First 5,000 Days," by an artist named Beeple. Christie's says it has auctioned off a digital collage by an artist named Beeple, whose real name is Mike Winkelmann, for nearly $70 million, in an unprecedented sale of a digital artwork that fetched more money than physical works by many better known artists. The piece sold for $69.4 million in an online auction, positioning him among the top three most valuable living artists," Christie's said via Twitter on Thursday. (Christie's via AP)
This undated photo released by Christie's on Thursday, March 11, 2021 shows a digital collage titled Everydays: The First 5,000 Days," by an artist named Beeple. Christie's says it has auctioned off a digital collage by an artist named Beeple, whose real name is Mike Winkelmann, for nearly $70 million, in an unprecedented sale of a digital artwork that fetched more money than physical works by many better known artists. The piece sold for $69.4 million in an online auction, positioning him among the top three most valuable living artists," Christie's said via Twitter on Thursday. (Christie's via AP)

LONDON – A digital art piece, tweaked using cryptocurrency technology to make it one-of-a-kind, sold at auction this week for nearly $70 million. That transaction made global headlines and buoyed already-mushrooming interest in these kinds of digital objects — known as non-fungible tokens, or NFTs — that have captured the attention of artists and collectors alike.

A NON-WHAT TOKEN?

In economics jargon, a fungible token is an asset that can be exchanged on a one-for-one basis. Think of dollars or bitcoins — each one has the exact same value and can be traded freely. A non-fungible object, by contrast, has its own distinct value, like an old house or a classic car.

Cross this notion with cryptocurrency technology known as the blockchain and you get NFTs. These are effectively digital certificates of authenticity that can be attached to digital art or, well, pretty much anything else that comes in digital form — audio files, video clips, animated stickers, this article you're reading.

NFTs confirm an item's ownership by recording the details on a digital ledger known as a blockchain, which is public and stored on computers across the internet, making it effectively impossible to lose or destroy.

At the moment, these tokens are white-hot in the collecting world, where they're being used to solve a problem central to digital collectibles: how to claim ownership of something that can be easily and endlessly duplicated.

I STILL DON'T GET IT. CAN'T ANYONE JUST COPY DIGITAL STUFF OFF THE INTERNET?

Sure, anyone can download a copy of Beeple's art from his social media feed, print it out, and hang it on the wall. Just like you can take a photo of the Mona Lisa in the Louvre or buy a print from the museum gift shop. But that doesn't mean you own those original artworks.