AUSTIN, Texas — If you walk so much as a block in Downtown Austin during South by Southwest (SXSW) 2022, you'll probably hear or see something related to NFTs, blockchain or the metaverse. SXSW itself even has its own NFT profile picture, or PFP, this year.
But if these tech buzzwords have you feeling out of the loop, have no fear. We've created a guide to the basics of NFTs, blockchain and the metaverse.
What is an NFT?
NFT stands for non-fungible token. Non-fungible means that it's unique and can't be replaced with something else. A bitcoin, for example, is fungible – you can trade one for another identical one.
The token part of NFT is the digitalization of something through an encrypted blockchain. According to The Verge, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like Bitcoin, but its blockchain also supports NFTs, which store extra information that makes them work differently.
An NFT can technically be any digital asset, including music, social media posts or video clips. But right now, the buzz is focused on one-of-a-kind digital art. Creators, businesses and celebrities are buying and selling NFTs as ways to bid, explore and commercialize their brands while generating revenue. Forbes wrote in February that $174 million has been spent on NFTs since November 2017.
The Verge also notes that NFTs are designed to give purchasers something that can't be copied: ownership of the work, though not necessarily the copyright and reproduction rights. "To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original," The Verge wrote.
At a SXSW event on Tuesday, Facebook CEO Mark Zuckerberg said that NFTs are coming to Instagram "in the near term," but he didn't specify exactly when.
What is blockchain technology?
Cryptocurrencies like Bitcoin and NFTs operate on blockchain technology. But what does that mean?
Blockchain technology is a digital system that allows users to record, store and manage information – similar to a digital ledger or a database. Multiple users can use the online system to collaborate, edit and input information at the same time.
The difference is that users can't change information once it's in the system. The system is also decentralized, and the stored information can be verified by multiple users.
As its name suggests, blockchain is information that's chained together like blocks. Once new data is entered into the system, it's timestamped and connected to all previous transactions ("blocks") before it.
What is the metaverse?
Mark Zuckerberg describes the metaverse as a "virtual environment" that you can go inside of instead of just looking at it on a screen. It's like a world of interconnected virtual meetings, where people can interact using virtual reality headsets, smartphone apps and other technology.
Experts say it will also incorporate other aspects of online life, like shopping and social media. Metaverse users can attend a virtual concert, take a trip online or work in a virtual office, among other things.
And the metaverse isn't just a Facebook project. Microsoft and Epic Games (the company behind "Fortnite") are just two of the major companies looking forward to how they'll incorporate the metaverse into their products.
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