Key Takeaways

• You may have heard the acronym NFT swirling around these days.
• Cryptocurrencies and cryptographics have become popular in recent years.
• If you’re going to buy NFTs, make sure you do your research.

What is an NFT (besides yet another new acronym to learn)? You may have heard of NFTs, as they’ve been popping up more and more in conversation and a variety of articles. With so much interest in them, it’s a good idea to have an understanding of what they are.

NFTs are non-fungible tokens and they are part of blockchain technology – think Bitcoin or Ethereum cryptocurrencies. There are cryptocurrencies whose blockchains support NFTs, which are unique, easily verifiable, digital assets. These can be GIFs, images, videos, or anything that can be done digitally, within reason.

In this sense, NFTs are more like cryptographic tokens than cryptocurrencies. The difference is that whereas cryptocurrencies are fungible (in other words, interchangeable – you can substitute one bitcoin for another bitcoin), NFTs are distinct and different from each other, unique on the blockchain. You might think of them as one-of-a-kind artworks or limited edition trading cards.

Now, you may be asking why you’d want to own an NFT. They are, in one way, an emotional purchase. The first ones that came out were CryptoKitties, the 1980s equivalent of which might have been Cabbage Patch Kids. Those dolls were a huge trend and people went out of their way to purchase them. With CryptoKitties, people feel there’s a value to them – and when others also feel there’s value to them, selling and trading occurs, with people making money along the way.

Which brings us to a second reason people purchase NFTs. Yes, you can buy an NFT and make money when you sell it, assuming that the value of that particular digital asset goes up in the mind of somebody else.

This is a whole new arena. There are a variety of platforms available to do this, if you’re looking to buy NFTs. But you will likely need to do a bit of research, so make sure you spend some time learning about them to understand how they work before diving in. Until next time, enjoy.

Gary

If you’d like to read more on this topic, here are a few of our past Coyle Blog posts that you might enjoy:

Cryptocurrency Confusion

The Super Credibility Curve

Gary Klaben serves as a Financial Advisor, and visionary for Coyle Financial Counsel. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield.  Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.

Learn more about The Coyle Process, approach designed to get your arms around the big picture, so you can make informed financial decisions. Ask Gary about The Coyle Process and schedule a complimentary consultation and start living the Good Life Managed Well™.

www.coylefinancial.com
847-441-5644 | coyle@coylefinancial.com

 We value your comments and opinions, but due to regulatory restrictions, we cannot accept comments directly onto our blog.  We welcome your comments via e-mail and look forward to hearing from you.

 All information is from sources deemed reliable, but no warranty is made to its accuracy or completeness.   This material is being provided for informational or educational purposes only, and does not take into account the investment objectives or financial situation of any client or prospective client.  The information is not intended as investment advice, and is not a recommendation to buy, sell, or invest in any particular investment or market segment.  Those seeking information regarding their particular investment needs should contact a financial professional.  Coyle, our employees, or our clients, may or may not be invested in any individual securities or market segments discussed in this material.  The opinions expressed were current as of the date of posting but are subject to change without notice due to market, political, or economic conditions. All investments involve risk, including loss of principal.  Past performance is not a guarantee of future results.

Copyright © 2021 Coyle Financial Counsel.  All rights reserved.