Muggle Studies 101: NFTs Explained
INTERIOR SCENE. Hogwarts. Daytime. Muggle Studies classroom.
20 Hogwarts students take their seats and open their books. Professor Burbage is standing in front of a blackboard that displays the letters “N,” “F,” and “T.” She looks apprehensive.
Professor Burbage: All right, settle down class. Today we are going to learn about NFTs.
Befuddled murmurs sound from the seated students.
Professor Burbage: Confused? Yes, that’s to be expected. Please turn to page 59, the section titled “World Wide Web.” Now, if you remember our last unit on digital magic, you will recall that Muggles use square-shaped boxes, or computers as they call them, to summon information, still portraits, moving portraits, and other media.
Birtwistle: (whispering) Yeah, like porn!
Professor Burbage: That’s enough, Miss Birtwistle. NFTs, or as they are officially known, non-fungible tokens, is a subject that is taking the Muggle world by storm. Remember that Muggle currency can be tangible or digital? Well, an NFT is a form of digital asset that is unique and is bought and sold online using cryptocurrency.
Cantley: So NFTs are not a product, then?
Professor Burbage: Yes, Miss Cantley, they are a product. An NFT can be any form of digital art, such as music, drawings, or even memes. For example, take this image from the witch artist Madam Sehgal.
Muffled giggles sound from the seated students.
Professor Burbage: Madam Sehgal has produced a series of works titled “Bored Snape Boggart Club.” These sorts of NFTs are highly sought after in the Muggle world.
Greengrass: And you pay for them with invisible money?
Professor Burbage: Cryptocurrency, Mr. Greengrass.
Fenton: But aren’t NFTs digital money? What is the difference between an NFT and cryptocurrency?
Cantley: Yeah, a Galleon by any other name is still a Galleon, right?
Professor Burbage: Not quite. Take a look at the diagram on page 62.
Professor Burbage: Though crypto and NFTs are created using a similar programming language, NFTs cannot be exchanged, traded, or changed like assets of the cryptographic variety.
Walshingham: So how do you receive your NFT? Do they owl it to you?
Professor Burbage: You mean mail it? No, you don’t receive an NFT in your hand, so to speak. It remains online in digital form. The token remains hidden in those quirky artworks. There’s a unique and noninterchangeable unit of data stored on a digital ledger using blockchain technology to establish proof of ownership.
The class gives Professor Burbage blank looks.
Birtwistle: But how can NFTs be products, then?
Professor Burbage: Okay, to explain further, NFTs are individual tokens with valuable information stored in them. They hold a monetary value and can be bought and sold just like physical types of art.
Plumstead: So you then own the artwork?
Professor Burbage: No, not exactly. Buying an NFT from someone does not mean you own the digital or physical assets it represents, though you own the certificate or receipt of the artwork.
Blofield: Wait, so you give your Galleons to someone and then don’t get anything in return?
Professor Burbage: No, you could use the NFT image you bought as your profile picture – refer to page 32 on social media – or post it online, or in some cases, Muggles use them to brag.
Walshingham: (murmurs) I wouldn’t brag about something I spent Galleons on that wasn’t even mine.
Professor Burbage: Well, it might pay to. You see, if you buy an NFT, you gain ownership of the content, but the NFT can still be visible on the Internet and gain popularity, increasing its value, so to speak. When you sell your NFT, the original creator gets a small cut while you pocket the rest. So actually, there is potential for ongoing revenue from popular NFTs as they are bought and sold over time.
Greengrass: How many Galleons are we talking about here?
Professor Burbage: Hmmm, it could be anywhere from cents to hundreds of thousands. In fact, one NFT called “Merge” was sold for $91.8 million. That’s 15.9 million Galleons.
Madgwick: What? No way! Let’s buy some! Yeah!
Professor Burbage: This is rare, though, class.
A Ravenclaw student raises their hand.
Professor Burbage: Yes, Perth?
Perth: How can you prove that you own the NFT, though?
Professor Burbage: Ah, great question! As explained before, each NFT is made of unique data. It cannot be exchanged or replaced. This makes it easy to verify and validate the ownership and the transfer of tokens between owners if you look at the blockchain ledger for that NFT.
Perth: Oh, so like a curse if anyone tries to steal it?
Professor Burbage: Well, yes and no. You see, sometimes counterfeits of your NFT do appear.
Plumstead: Wait, so you could drop 15 million Galleons on something that gets copied?
Professor Burbage: The counterfeits are taken down as soon as possible.
Fenton: Well, what’s to stop me from casting a Doubling Charm and copying the “Mound” or “Merge” – whatever it’s called?
Professor Burbage: I guess… common decency.
Titters of amusement fill the classroom.
Perth: Can I create a physical NFT and put it on my wall?
Professor Burbage: Well, that’s not what they are supposed to exist for since they are digital. You don’t actually own the content of your NFT, remember, just the certificate of ownership.
Birtwistle: Merlin’s beard. That’s like saying, “Here, buy this broomstick. You don’t actually get the broomstick, but you can tell people you own it and when they ask to see it, show them the receipt.”
Professor Burbage: No, that’s not quite…
Plumstead: Yeah! Or “Here is a house. You can’t live in the house, but you can pay for it and we’ll give you the deed!”
Professor Burbage: Class, I think you are missing the…
Fenton: Professor, do you own an NFT?
Professor Burbage: No, I don’t.
Birtwistle: Would you buy one?
Professor Burbage: Well, it’s hard to say…
Cantley: But would you, though?
Professor Burbage: I don’t have a computer, so I wouldn’t be able to use a digital wallet.
Perth: But if you did. Would you buy one? Like this one here?
Professor Burbage: (sighs) In all honesty, no.
The students burst into gleeful laughter.
Birtwistle: See, they are about as useful as tits on a Bludger.
Professor Burbage: Birtwistle!
Professor Burbage: All right, all right. I must admit, the whole purpose of NFTs debuting into mainstream Muggle culture is a little beyond me, but it is so we are better equipped to know the Muggle world if we understand their customs, however odd they are. So read Chapter 6 and write me one parchment paper on NFTs and how they would work in the wizarding world. Be creative!
A collective groan is muffled by the sound of the bell. Professor Burbage sighs with relief.
Professor Burbage: Class dismissed!