The Creator Economy - the economic activity generated by the people who create online digital content and the firms that serve them - is a hot topic in tech circles.
And one of the hottest creator economy topics is NFTs. These are non-fungible tokens.
The reason they're hot is they provide a way to make money selling digital content.
In simple terms, an NFT is used to prove the ownership and uniqueness of a digital item.
NFTs are tokens (digital code) that are attached to digital assets and content. The tokens use blockchain technology, which provides the ability to track the content's origin and current ownership.
This means the objects an NFT is attached to can be bought and sold.
For example, a digital art piece recently sold for $6.6 million on an online art marketplace.
And the art auction house Christie's is currently running an auction to sell a digital art piece (pictured) by the artist known as Beeple.
Current bidding is over $3 million. **Update: Beeple's digital art piece sold for a stunning $69 million after a frenzy of last minute bids.**
Another example is sports video highlights. A film clip of a Lebron James dunk recently sold for over $200,000.
You may be asking why anyone would want to own digital content that can be freely downloaded from the Internet.
Key quote on this from TechCrunch's The Explosive Potential of NFTs in the Creative World:
“Humans inherently, whether we will like to admit it or not, want to own things,” Ronin said. “And I think that that’s part of the human experience is owning things. When you own things, it’s a connection, and it’s like you have a reason for being and there’s something unique about ownership ...”
Supporting this is the fact that people are willing to pay astronomical sums of money for physical works of art when free or cheap copies are easily available.
So on some level, it makes sense that people are willing to pay to own original digital content.
The challenges of earning money in the creator economy is another hot topic. This is because while some creators (the vast majority are independent workers) make a lot of money, most make very little.
The hope is NFTs will allow more people to monetize their digital assets.