In 1969 Norman Whitfield and Barrett Strong asked a generation, "War; what is it good for?" But unlike their ultimate conclusion reflecting the valueless nature of conflict, today when we might ask, "NFT; What is it good for?" one would be remiss to dismiss them as simply a newfangled neogenerational fad like Cabbage Patch Kids, yo-yos, Pogs, or Tickle me Elmo.

My initial encounter with NFTs ( Non-fungible tokens) was likely similar to most, through the medium of NFT art. Large NFT art markets allow one to purchase and exchange unique tokens which represent the ownership of a particular digital asset. These tokens are ascribed value because of their cryptographically derived digital scarcity and through the capitalist magic of the invisible hand [wave].

Through a process reaching consensus among a distributed network of nodes, an owner is assigned at the moment of creation, and modified though transactions; when a transaction is processed, the owner's wallet address is etched onto the blockchain and the holder of that wallet, the one who is able to produce the corresponding private key, is said to have ownership of an asset specified in the metadata of NFT smart contracts.

The instantly rich, the crypto-enthusiasts, the curious, and those who don't necessarily get it but don't want to miss the boat are all scooping these up as fast as artists can mint them onto the blockchain of their choosing; most commonly Ethereum, the first major cryptocurrency to implement smart contracts. More recently, Polygon is another option for creators as it allows one to create NFTs with far less upfront costs, "gas."

Since I first began this article (it was a rescue from the archives), plenty of new blockchain platforms have arisen and they are more than simple copycat; they are offering unique and desperately needed features for artists and content creators.

While there are many types of NFTs, fungible and non-fungible, I want to specifically focus on what I see as the potential for the latter; that is, NFTs that are not interchangeable with each other, as each possesses unique qualities and characteristics. There are a few reasons for this. These are called Fungible Tokens. As an asset where any one is as good as the next and they can be swapped. When you want to offer liquid assets that one may buy and sell as many as they like whenever the would like to do so (such as stocks or an in-game quantitative property like mana.)

First, the inherent value proposition of NFTs is that they can represent anything that has value. Unlike a digital file that can be duplicated infinitely, once an user creates (mints) an NFT, it is uniquely one-of-a-kind. It is this very cryptographic digital scarcity that allows it to be assigned value. Most people still think of NFTs strictly in reference to the art world. However, NFTs can and soon will represent all kinds of assets, both digital and sooner than you probably think, they will represent physical asset ownership as well.

"Why?" you might ask. Why do I need to buy an NFT with my morning coffee; the system we have currently seems to work just fine. While that may be true, it's important to remember that the current system is based on centralized trust. We trust that the entity we are buying our coffee from has actually roasted the beans and not just put a picture of a roasted bean on the bag. We trust that the money in our wallet is actually worth something and that when we hand it over to the coffee shop, they will give us coffee in return.

NFTs remove the need for centralized trust by implementing a trustless system in which ownership is verified and secure by the immutable properties of blockchain technology. In other words, once an asset is "owned" by an individual, it can never be taken away and is always verifiable. This is the key to the security and potential for mass adoption of the NFT.

Let me give you an example:

I purchase a digital asset, let's say a piece of art, from an artist on a blockchain platform. The artist has verified that the art is unique and has a corresponding certificate of authenticity stored on the blockchain. I now own that asset and no one can take it away from me. I can transfer it, sell it, or do whatever I want with it as long as I have the private key that corresponds to the wallet address that holds the asset.

What about physical assets? Think about this simple example and the benefits it offers:

I purchase a new iPhone from the Apple store. I go to the checkout and hand the cashier my money. They hand me back my new iPhone. In this system, trust is centralized. I trust that the cashier has actually given me a new iPhone and not a used one, or a fake one for that matter.

Now imagine the same scenario with NFTs. I go to the Apple store, but this time I purchase a new iPhone with an NFT. The Apple store has verified that the iPhone is new and has a corresponding certificate of authenticity stored on the blockchain. I now own that asset and no one can take it away from me. I can transfer it, sell it, or do whatever I want with it as long as I have the private key that corresponds to the wallet address that holds the asset. Not only that, I have on the blockchain an immutable (that is, something which cannot be altered) record of the fact that I own the new iPhone.

This offers several advantages beyond simply that record of ownership; social proof. Social proof is a psychological phenomena that refers to our tendency to look to the actions of others to guide our own behavior. In the digital world, this is often demonstrated when we see that our friends have "liked" a piece of content on social media. It is the reason why influencer marketing is so successful. NFTs offer a way for brands to create this social proof on the blockchain by securely and transparently verifying the authenticity of products and assets.

As blockchain technology matures, several services which make NFTs and even coins essentially multichain, interoperable. This means that different blockchains can talk to each other and that coins and assets can move freely between them. This opens up a world of possibilities for NFTs and essentially creates a global digital asset market in which anything with value can be traded.

It means that creators can monetize their work in a new and secure way. Content creators can "mint" their work into NFTs and sell them on blockchain marketplaces. This offers a more secure and transparent way for them to monetize their work and to receive payments for their work. It also offers a way for them to build social proof for their work.

Suppose I want to do even more with the NFT I'm minting and attempting to sell. I might create a smart contract that pays me not just for the initial sale, but will give me a significant cut of each subsequent sale. If you've been following the new and seen some of the rediculous prices that some NFTs sell for, you might imagine that these artists are continually collecting passive income from their work.

This is where things start to get fascinating.

Not only do NFTs offer a new and secure way for content creators to monetize their work, they offer a way for them to incentivize these purchases in the first place; through the use of rewards.

Rewards are a way for content creators to incentivize the purchase of their work. Rewards can be in the form of anything, but common rewards include unique digital assets, exclusive access to content, or even a portion of the profits from the sale of the NFT. Rewards also offer a way for content creators to create a sense of community around their work.

Fungible tokens are interchangeable with each other and are created similarly with smart contracts that define how they work. They are liquid assets, the ones you commonly trade at cryptocurrency exchanges. They are created by users depositing a specified amount of cryptocurrencies into a smart contract, which in turn generates a specific amount of fungible tokens. These fungible tokens are interchangeable with each other and are created similarly to NFTs. By creating, for