Currently, the world’s premier currencies are experiencing enormous monetary inflation not seen since the 1970’s, the years known as stagflation. This is resulting in unprecedented increase in retail prices across the board from consumer goods to construction materials. The current feeding frenzy by large cash holders, such as the American BlackRock investment management corporation to purchase whole swaths of housing divisions, is an indication of the long and protracted years of inflation caused by money printing we can anticipate. BlackRock is using property as an inflation hedge against the loss of value of the US Dollar. Housing pricing and sales have skyrocketed to meet the demand of the old aphorism “The safest place to put your money is in the ground”. Since most people don’t have the resources of a BlackRock, they are turning to something better - “little pieces of property”. The tiny pieces are known as Non-Fungible Tokens (NFTs).
Source: Tim Pool and YouTube
What are NFTs?
“Most people are not just comfortable in their ignorance, but hostile to anyone who points it out.”- Plato.
This can be said of current understanding of NFTs and what they are. NFTs are simply claims of title against property, both tangible e.g., real estate, automobiles, art and intangible e.g., electronic art, brands, goodwill. As an example, a single home can have a million titles each representing a small portion of the home. Each title certificate is unique with its own individual serial number. These titles can be individually exchanged.
Why did NFTs suddely appear?
As described above, massive amounts of titles are not practicable. Previously, in order to create a million titles for an individual home, one million printed pages of paper would have stood at 328 feet (100 metres) tall, weighing 11,000 lbs (5,000 Kg). Obviously, this is not practicable in using paper titles as units of exchange.
What did NFTs change?
The advent of blockchain technology and distributed ledgers allowed the exchange of titles instantly with 100 percent surety on their authenticity. Now, in order to exchange £50,000 of a £1,000,000 property, it can be done in a few thousands of a second anywhere around the world with just a mobile device. Previously, it would have taken a few months.
What NFTs are not?
NFTs are claims of discrete title against the ownership of tangible and intangible property. They are distinct titles and cannot be divided. They are fusible into large collections of titles to represent varying degrees of ownership of property. One thing they are definitely not is financial instruments. A common mistake by the financially illiterate or mal-educated is to conflate units of account e.g., USD, GBP, EUR, BTC, ETH with titles of property. These are mutually exclusive and have nothing in common from a regulatory or legal perspective.
NFTs are becoming the new financial safety net to keep wealth safe from monetary inflation. Because they represent claims of discrete title to specific property, they are becoming the safest place to store wealth against monetary inflation. The stark contrast between legacy fiat inflation caused by government spending and a simple, straightforward, intuitive system of owning real pieces of real things is intrinsically understandable to anyone at all levels.