(chuckles) - Oh, this is gonna be great.
- Are you watching old Two Cents videos?
- Yeah, I just learned that we can make a bundle
by turning our creative content into NFTs.
I'm gonna make us crypto millionaires
by turning our catchphrases into gold.
I bet we could sell a Run the Numbers NFT.
Ooh, maybe I could turn my old mustache into one.
Oh, those are like rainbow cat Bitcoins, right?
But how are you gonna make money off of that?
- Well, I mean, I don't really understand it,
but the way my friend explained it to me,
first, you mine a piece of art,
and then something, something, something,
until one day you just cash out and live in The Bahamas.
- Oh, that sounds legit, huh.
- Ooh, I wonder if we could turn our dog into an NFT.
She has not been pulling her financial weight
around here lately.
- Oh.
(playful music)
By this point, you've likely seen the letters NFT
drift across evening news, or even your TikTok feed.
NFTs, or non-fungible tokens, are a new way
to own unique digital assets through the blockchain.
They've actually been around since 2014
but have exploded in popularity in recent years.
- To quote Julie Andrews,
"Let's start at the very beginning."
If I wanted to create an NFT,
I need to begin by creating two online accounts,
a cryptocurrency wallet
that allows me to hold cryptocurrency, like Coinbase,
and an NFT marketplace account like OpenSea.
Once I've created a profile
and verified my credentials on these platforms,
the next step is to decide on a digital asset
I wish to turn into an NFT.
I've decided this sweet picture
of our dog jazz should fit the bill.
- Philip will then upload the image
to the marketplace and click Create.
When he does this, the platform will permanently record
onto a blockchain like Ethereum
that Philip's account owns this digital work.
To create this entry, he'll have to pay
what are called gas fees to make the record.
He will of course have to pay them with Ethereum
and it will cost him the equivalent of 10 to 100 bucks.
Once the ownership of this entry on the blockchain is made,
Phillip's account will receive a digital token
proving his ownership that's unique to his account.
- This token is non-fungible,
meaning that there is no other token like it
and it cannot be duplicated.
So now what?
I can just keep it if I so choose,
or I could sell it outright or list it for auction
if I thought multiple people
might be interested in owning it.
People might even get into a bidding war for it.
I mean, come on, she's the goodest, cutest girl ever.
- Let's say his hunch is right.
And there turns out to be a bidding war,
and it sells for $200 worth of Ethereum.
The new owner now has the NFT
that is recorded on the blockchain,
proving to everyone that they own this digital asset.
but it's not like they own copyright.
Phillip still has this image on his phone,
and anyone else could come along
and snap a screenshot of the image
and it would be perfectly legal.
So why would anyone wanna bid on something like this?
- At this stage in their evolution,
NFTs primarily represent creative works,
such as visual art, music, and video game items.
The appeal to own such items is no different
than wanting to own an original Picasso rather than a print.
It's a flex.
And since NFTs are displayed publicly,
you can show off far and wide,
not just to people who come into your house.
And like an original Picasso,
if you have a piece that's special or rare enough,
it could turn into a lucrative investment.
- The very first NFT was for a digital art piece
by Kevin McCoy called Quantum.
And it recently sold at Sotheby's for $1.4 million.
That's right.
Someone paid 1.4 mil for the right to claim ownership
over a pixel art piece
that anyone can take a video screenshot of.
Jack Dorsey, a co-founder of Twitter,
sold an NFT for his very first tweet for $2.9 million.
And in 2021, the digital artist Beeple
sold a collection of his work for $69 million
at Christie's Auction.
No doubt about it.
Serious money is rapidly flowing into this market
and it's turning lots of heads.
- To many of us, this might still feel
like a digital version of Beanie Babies,
but most advocates believe
that we're merely witnessing NFTs
in the first phase of their evolution.
Remember, an NFT is not a piece of art,
it's inalterable proof of ownership of what, for now,
is mostly creative work.
But NFTs could easily be used in the future
to represent the ownership of a piece of real estate
or perhaps you might receive even NFT
upon graduating college to show ownership of your degree.
- NFTs promise to empower a new creator economy,
where creators don't hand over ownership of their work
to a publishing or streaming platform.
Ownership is baked into the content itself.
along with any royalties or future income from the work.
For example, what if Beyonce's next album
was sold by creating 20,000 NFTs?
And the only way to access the music
was by providing your proof of ownership.
I know I'd be setting up a Coinbase account
quicker than you could say blue ivy.
- But again, this is the future we're talking about.
What if you're getting pressured by your roommate
to dump a bunch of money into Bored Ape NFTs right now?
Is it a bubble that you should stay far away from?
Or is your FOMO justified?
- In our opinion, neither.
Sure, the piles of money and buzz
pouring into NFTs right now does look a lot like a bubble.
And it likely is.
But many new technologies often begin
with a bubble-like stage
that actually ends up pushing innovation forward.
Think about the .com boom and bust,
or even the bicycle bubble in Britain in the 1890s.
Oh yeah, that actually happened.
But thankfully, bikes and the internet
are still very much a thing.
We are in the early days of cryptocurrency,
blockchain use and NFTs,
which could be a good time
to start to dip your toes in the water, right?
- Perhaps, but here's a word of caution.
If you're looking to NFTs as a way to get rich,
you might want to reassess.
We never recommend engaging in speculative investments
with money you can't afford to lose.
And it's never a good idea to invest
in anything you don't really understand.
- If you've done your research
and are ready to take a bit of a gamble, go for it.
Just make sure you're keeping the percentage
in emerging asset classes like this low
in your overall portfolio.
- So how do you think NFTs will shape our world
in the coming years?
Will this be a flash in the pan after all,
or the future of ownership?
We'll just have to wait an NF-see.
(record screeching) - Oh.
And that's our Two Cents. - And that's our Two Cents.
- Before you go,
could a blind gamer beat you in mortal combat?
Have you ever heard of the gay rodeo?
And why are these guys putting underwear on goats?
- [Philip] "Subcultured,"
a brand new documentary series from PBS,
answers those questions and so many more,
exploring lesser known communities
and folks that have had a major impact on the mainstream.
- Check it out over on PBS Voices, link in our description,
and let them know that Two Cents sent you.
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