NFTs 101

Non-fungible tokens (NFTs) have recently become incredibly popular, with U.S. Rock Band Kings of Leon selling its latest album as an NFT, and Christie’s Auction House selling digital artwork for $69 million as an NFT.

Ramona Pringle, a tech expert and associate professor at Ryerson University, explains that an NFT is a digital token associated with a specific piece of work. The token uses blockchain technology to make each token unique to the object, and lets users who own it track its movement.

“So there’s a record of when you put it on the blockchain, any sales that are made and any trades that are made,” she says.

Pringle also explains that blockchain is a “digital ledger,” that is a networked ledger. “It’s not like a ledger that is kept in one banker’s drawer and that banker is the only one who gets to see it. It’s publicly accessible on this network system,” she said.

You need cryptocurrency in order to buy an NFT and Pringle says one of the reasons NFTs are trending now is because some hope for it to be a new economic model.