The world wasn\u2019t crying out for a turtle-cat hybrid. But the arrival of \u2018Turtle-cat\u2019 in 2018 proved such a hit that someone forked out US$25,000 for it. What they paid for wasn\u2019t a new-to-science discovery, a genetic experiment, a toy, or even an astounding work of art, but what is rather catchily known as a \u2018non-fungible token\u2019 (NFT).<\/p>\n

If you\u2019re lost at the words \u2018fungible\u2019 or \u2018token\u2019, you\u2019re not alone. NFTs are a bewildering subject. Essentially, they\u2019re a digital trading system.<\/p>\n

\u201cNon-fungible tokens are similar to cryptocurrencies, like Bitcoin,\u201d explains Peter Howson, senior lecturer in international development at Northumbria University<\/a>.<\/p>\n

Pete Howson explains the key terms of NFTs below, but for more detailed information, our colleagues on BBC Science Focu<\/em>s have put together an guide on everything you need to know about NFTs<\/a>.<\/p>\n
What are NFTs?<\/h2>\n
Non-Fungible Tokens are similar to cryptocurrencies, such as Bitcoin, but whereas individual Bitcoins all have the same value and are interchangeable, each NFT has a different value. NFTs exist on your computer as digital representations of artworks, songs, films, event tickets, and games.<\/p>\n
What is a blockchain?<\/h2>\n
A blockchain is a shared electronic database, like a DropBox folder, except you can only add files to it. You can\u2019t change or delete anything already there. There are loads of different blockchains. But most NFT creators use Ethereum, which uses an energy-intensive computer function called \u2018mining\u2019. It\u2019s called mining because, like digital gold coins, that\u2019s how new cryptocurrencies are created.\u00a0<\/span><\/p>\n
What is mining?<\/h2>\n
With DropBox your shared folder is looked after by a company for a fee. With a blockchain, there\u2019s no company. Instead, the blockchain uses a global network of millions of \u2018mining\u2019 computers that compete to process your data for a fee. They play a game to guess the combination to a long string of digits, with the most powerful winning a few thousand pounds worth of cryptocurrency. The combination changes every 15 seconds and the contest continues forever.\u00a0<\/span><\/p>\n
How do NFTs work for wildlife photographers?<\/h2>\n
\u201cThe collector of an NFT owns only a token \u2013 a type of digital certificate of ownership. Its value is determined by what someone is willing to pay for it, based on exclusivity and the photographer. The photographer owns the original image copyright and the collector can\u2019t reproduce the image,\u201d wildlife photographer Richard Bernabe.<\/p>\n
\u201cSometimes the photographer will include a print as a nice gesture, or maybe the collector would want to possess the image file (ie JPEG) the token represents. That\u2019s fine, but neither is where the NFT gets its value. Imagine a Manchester United jersey signed by Ronaldo. If he were to sign it and then provide a certificate stating it is the only one he has ever signed, it would be the certificate, not the jersey itself, that is of most value. It\u2019s the same with NFTs.\u201d<\/p>\n
Turtle-cat, also known as Honu, was created by online blockchain game CryptoKitties, and was auctioned to raise money for marine conservation. It was a sign of things to come \u2013 NFTs now sell for ludicrous sums of money, and are proving a significant source of revenue for charities.<\/p>\n
\u201cWhen this pretty rubbish picture of a turtle-cat sold for US$25,000, people were like: \u2018What\u2019s going on?\u2019 It was a mind-blowing sum of money,\u201d says Howson. \u201cBut that cryptocurrency went to ocean conservation charities. As long as there have been NFTs, there have been wildlife charities making money from people donating them or giving them the proceeds. Cartoon apes have sold for \u00a3700,000, with the money going to an orangutan charity. \u00a3500,000 from NFTs also went to Virunga National Park<\/a>.\u201d<\/p>\n
Emerging in 2015, NFTs have ranged from collections of animal drawings, like Pepe the Frog, to a house on Mars (digital, not real) that sold for US$500,000. The value of an NFT isn\u2019t connected to its brilliance, beauty or physical value, so an NFT of a photographic masterpiece isn\u2019t necessarily of higher value than a quirky cartoon. CryptoPunk 7804, for example, a pixelated figure smoking a pipe, sold for US$7.5 million.<\/p>\n
$\""A\"$ <\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/div>