Disclaimer: I do not own any cryptocurrencies at the moment of this writing, nor do I own any NFTs.
Unless you’ve been living under a rock, you can no longer ignore Bitcoin, NFTs, and other related blockchain and cryptocurrency technologies.
But life is busy, and if you haven’t had time to catch up on all this, no worries, I got you covered. Here I talk about the state of Bitcoin and NFTs, and I provide a list of articles, podcasts, and videos, that you can use to learn about the topic.
Bitcoin and other cryptocurrencies
Bitcoin is a distributed cryptocurrency that you can use to buy things anonymously. It is based on the blockchain technology,
To acquire Bitcoins, you can either convert real currencies like euros or dollars, or you can “mine” bitcoins. Although mining is now crowded with people who have specialized hardware, and it requires a lot of electricity, so you probably won’t be successful doing it.
Important thing to know: 65% of all Bitcoin mining is done in China, which posed issues with electricity outages. The Chinese government just announced it would crack down on Bitcoin mining, making a lot of Chinese bitcoin miner decide to leave the country and move their operations someplace else.
There are a couple of events that shook the crypto world recently.
First, Tesla announced it invested US$1.5 billion in bitcoin in preparation to take bitcoin payments, the bitcoin price went from US$39,000 to US$48,000 in 24 hours. Some experts are speculating that investing US$93M in Bitcoin would raise the value by 1%.
Second, major established players are getting into the game. For example Visa said they were going to enable Bitcoin payments for 70M merchants.
This means Bitcoin is no longer a fringe currency, it has turned mainstream.
Bitcoin is not the only cryptocurrency. The second most famous one is Ethereum, upon which most of the NFTs are built upon.
There are also a lot of long-tail, less known coins, called the “alternative coins” or altcoins for short. This includes Ethereum (which enable smart contracts), Litecoin, Ripple, and the likes. There’s even a meme coin called Dogecoin, a cryptocurrency started as a joke that is actually gaining momentum.
Learn more about Bitcoin and other cryptocurrencies
- A Short Introduction to the World of Cryptocurrencies (great to understand the core concepts of the blockchain technology)
- How Does Bitcoin Mining Work?
- Investopedia’s Guide to Bitcoin
- Bitcoin as a Religion (10-minute podcast)
- Bitcoin mining: US vs China (8-minute video)
Non-Fungible Tokens (NFTs)
NFTs are digital assets that exist on a cryptographic blockchain. Their particularity is that, as their name say, they are non-fungible, which in plain English means that they are unique and cannot be replicated.
NFTs are used to hold the value to a unique asset, and guarantee cryptographically that you are the unique owner of this asset.
To do so, you have to “mint” a token, minting here meaning creating a token, then you choose the type of smart contract you want on your NFT, and that’s it.
The smart contracts are an interesting part of the NFT concept, because the original artist can embed rolling royalty fees in those contracts. For example, an artist could set up an NFT so that he would get a 10% commission for any future resell event of this particular NFT, in perpetuity.
This article is a collection of resources that will get you started on cryptocurrencies and the latest about NFTs.
Right now, most NFTs rely on Ethereum as the supporting blockchain, but other cryptocurrencies are also minting NFTs.
There are major drawbacks of it. First, All the major cryptocurrencies, including Bitcoin and Ethereum, are using a lot of electricity, to the point that they are major contributors to global warming.
Second, most NFTs are linked to the domain names of the startups which minted them, most of which are going to go bust at one point or another. When this happens, nobody knows what is going to happen.
Third are wide speculations that NFTs are just another bubble waiting to burst, or form of Ponzi scheme or Multi-Level Marketing.
NFTs are also just one extra step in the world of collectible. People have been buying basketball cards, Pokémon cards, and even sneakers as a way to invest money.
Elon Musk, who’s been very active on Twitter on all crypto topics, had put out this techno song about NFTs and got an offer for US$1.1M, before he retracted it.
The world of NFTs culminated when, on March 11th 2021, the artist named Beeple sold a piece for US$69 millions, transferring the art as an NFT.
Since then, there have been rumors that this transaction was actually set up by the buyer, Metakovan, as a way to boost the value of the piece and create money out of thin air. The whole story is rippled with conflict-of-interest details, and Amy Castor wrote a great piece about it.
In any case, you can’t ignore the fact that something major is happening in how technology enables the sale and transfer of value, and it’s fascinating to be there to see it unfold. Check out the list below for resources to get you started on the topic.
Learn More About Non-Fungible Tokens (NFTs)
- Introduction to NFTs, from the official Ethereum website
- A background article on Metakovan, the mysterious buyer of the Beeple art that sold for $69M at Christie (yes, the major and legit art auction house based in NYC).
- Seth Godin’s article about why NFTs are, in his opinion, a trap
- Jonty Wareing’s thread on Twitter about what NFTs really are: a JSON blob that refers to the file the NFT represents.
- How to mint an NFT on Rarible (a 10-minute video that will give you a brief idea)
- About Crypto art and trading cards: article from the New York Times, and another one from the BBC.