What is an NFT?

NFT (non-fungible token).  You have been hearing more about these in the arts, music, film and sports industries. With Sprunger Originals, we create NFTs for items, athletes, teams, artists and events.  Just like a cryptocurrency token, non-fungible tokens exist on a decentralized blockchain except they have their own value and function when paired to a digital picture, art, song, video, event ticket, story and even a physical item that is unique or exclusive.  NFTs can be collected, traded, donated, sold or auctioned in an NFT marketplace or used in the metaverse. 

Features & benefits of an NFT paired to a trading card:

1. Proof of ownership: The NFT is your proof of ownership, title or  provenance.  It will include details such as grading and a serial or certificate number for matching to the physical item.  No more being scammed by sellers who use internet images to claim they own the card.
2. Security:  Your item will have an official digital twin for identify and preservation.  Since the decentralized blockchain ledger can never be edited, duplicated, lost or stolen, the image will match the real item.  Whereas centralized registries of item images, certificates, serial numbers or receipts used today are vulnerable to altering, hacking, database corruption and server failures.    
3. Digital content:  The NFT can have exclusive video, pictures or messages that only the owner has access to.
4. Resale:  NFTs can be sold and re-sold within a blockchain marketplace.  It's a new, secure, safe, and simple transaction marketplace.  Just ship the physical item to the buyer.  No need to mess around with the traditional resale platforms where scammers and fraudsters hang around.

Read: How does a Sprunger NFT affect the value of my item? 

Real world scenario:

Let's use a $100 bill as an example. It's the same as the other $100 bills you and your friends have in leather wallets.  It has value and is interchangeable with other $100 bills or equivalent currency such as five $20 bills.  This is known as fungible or fungibility.

Now consider this.  You have possession of the currency but no record of ownership.  Put it in the bank, it still has value and a centralized ledger record indicating that it's in your possession.

Take that same $100 in the bank and convert it to cryptocurrency.   You now have ownership of tokens on a decentralized ledger known as the blockchain.  Since the tokens are the same and interchangeable, they are considered fungible.  You keep these fungible tokens in your digital or crypto wallet.

Let's go back and replace that $100 bill with a Gretzky rookie card.  While the card may look the same as other Gretzky rookie cards, the trading card market considers each one different based on their condition and characteristics.  The value of each card is not the same either.  They are not equally interchangeable.  They are non-fungible.

Similar to the $100 bill example, you have possession of the card but no record of ownership.  Items or memorabilia like this have traditionally transacted or sold on what we call possession platforms.  Online auctions, dealer retail stores or trade shows for example.  You might get a receipt (centralized ledger) that you purchased it but no real ownership record.  This will become old school.

Types of NFTs

Phygital - paired to a real physical item.  Tokenized asset.
Digital - linked or embedded digital media such as a picture, video or music.
Fractional - Part ownership of a physical item or digital work.