NFT. Not For The.....

All the range on Wall Street is NFT, a non-fungible token. By definition, a "non-fungible" means not mutually interchangeable. So no two NFT's are the same. From music artists to professional sports players, NFT's have caught the interest of both buyers and sellers. The thrill of owning something that no one else has, and have everyone in the universe know that is the best stroke of ego anyone can get. The recent sale of a piece of art by a living artist for $69 million at Christie's signals an indication of how big the market for NFT's will be.

To be clear, in order for NFT's to work, an underlying financial exchange has to be in place. Most NFT's are part of the Ethereum blockchain, a cryptocurrency exchange. What makes crypto popular is its decentralization that encourages mass participation in its functionality.

For more information on how blockchain works https://www.youtube.com/watch?v=SSo_EIwHSd4

Now, as most old-school traders would tell you, myself included, change is despised. Why change something that isn't broken? Well, maybe, because there is something better?

Many hypothesize how blockchain, which supports NFT's and Bitcoin, will dominate the future. Its egalitarian edge so most people can participate bodes well for proponents who see a total addressable market by the whole world. The architecture of the digital ledger makes it more secure and private than conventional ways. These attributes are appealing to transact in more non-traditional assets such as art, sports cards, etc. Even Tom Brady and Patrick Mahomes have dipped their toes in NFTs.

The challenge with NFTs is that the transaction is highly reliant on a currently opaque market. Because the value of any NFT is dependent on supply and demand coming from individual market participants, determining the value falls more in line with an eBay auction. No one really knows the true value other than the winning bid. But maybe that's what the value really is - the perceived notion of what something should be worth. Then convincing everyone else that is the right number. Therein lies NFT - not for the faint of heart.