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 showing the letters “N”, “F” and “T”. She looks worried.

Professor Burbage: All right, settle down in class. Today we are going to learn about NFTs.

Confused murmurs are heard from the seated students.

Professor Burbage: Confused? Yes, that is 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’ll remember that muggles use square boxes, or computers as they call them, to summon information, still portraits, moving portraits, and other media.

Birtwistle: (whispers) Yes, like porn!

Professor Burbage: That’s enough, Miss Birtwistle. NFTs, or as they are officially known, Non-Fungible Tokens, are a topic that is taking the Muggle world by storm. Remember 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. Take, for example, this image from witch artist Madam Sehgal.

Muffled giggles sound from the seated students.

Professor Burbage: Madam Sehgal has produced a series of works entitled “Bored Snape Boggart Club.” These types of NFTs are highly sought after in the Muggle world.

Green grass: And you pay for them with invisible money?

Professor Burbage: Cryptocurrency, Mr. Greengrass.

Fenton: But aren’t NFT digital money? What is the difference between an NFT and cryptocurrency?

Cantley: Yes, a galleon by any other name is still a galleon, right?

Professor Burbage: Not completely. Take a look at the diagram on page 62.

Professor Burbage: Although crypto and NFTs are created using a similar programming language, NFTs cannot be exchanged, traded or changed in the same way as assets of the cryptographic variety.

Walsingham: So how do you receive NFT? Do they owl it to you?

Professor Burbage: You mean send it? No, you don’t get NFT in your hand, so to speak. It remains online in digital form. The token remains hidden in the quirky artwork. It is a unique and non-fungible device of data stored in a digital ledger that uses blockchain technology to establish proof of ownership.

The class gives Professor Burbage blank stares.

Birtwistle: But how can NFTs be products, then?

Professor Burbage: Ok, to explain further, NFTs are individual tokens with valuable information stored in them. They have a monetary value and can be bought and sold just like physical types of art.

Plumstead: So you own the artwork then?

Professor Burbage: No, not exactly. Buying an NFT from someone does not mean you own the digital or physical assets it represents, even if you own the certificate or receipt for the artwork.

Blofield: Wait, so you give your galleons to someone and then get nothing back?

Professor Burbage: No, you can use the NFT picture you bought as your profile picture – see page 32 on social media – or post it online, or in some cases Muggles use them for bragging rights.

Walsingham: (mumbles) I wouldn’t brag about something I spent galleons on that wasn’t even mine.

Professor Burbage: Well, it might pay off. You see, if you buy an NFT, you get 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 in fact there is potential for ongoing income from popular NFTs as they are bought and sold over time.

Green grass: How many galleons are we talking about here?

Professor Burbage: Hmmm, it could be anything from cents to hundreds of thousands. In fact, an NFT called “Merge” was sold for $91.8 million. That’s 15.9 million galleons.

Madgwick: What? Never! Let’s buy some! Yes!

Professor Burbage: However, this is rare class.

A Ravenclaw student raises his hand.

Professor Burbage: Yes, Perth?

Perth: However, how can you prove that you own NFT?

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 transfer of tokens between owners if you look at the blockchain ledger for that NFT.

Perth: Oh, so like a curse if someone tries to steal it?

Professor Burbage: Well, yes and no. You see, sometimes counterfeits of your NFT appear.

Plumstead: Wait, so you can drop 15 million galleons on something that gets copied?

Professor Burbage: The counterfeits will be removed as soon as possible.

Fenton: Well, what’s to stop me from casting a Double Charm and copying “Mound” or “Merge” – whatever it’s called?

Professor Burbage: I guess… common decency.

Giggles of fun fill the classroom.

Perth: Can I make a physical NFT and put it on my wall?

Professor Burbage: Well, that’s not what they’re supposed to exist for since they’re digital. You don’t actually own the contents of your NFT, remember, just the proof of ownership.

Birtwistle: Merlin’s beard. It’s like saying, “Here, buy this broomstick. You don’t actually get the broomstick, but you can tell people you own it and show them the receipt when they ask to see it.”

Professor Burbage: No, it’s not quite…

Plumstead: Yes! 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…

Fenton: Professor, do you own an NFT?

Professor Burbage: No I do not.

Birtwistle: Would you buy one?

Professor Burbage: Well, it’s hard to say…

Cantley: But would you?

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? Do you like this one?

Professor Burbage: (sighs) Honestly, no.

The students burst into cheerful laughter.

Birtwistle: See, they’re about as useful as nipples on a Bludger.

Professor Burbage: Birtwistle!

Professor Burbage: All right, all right. I have to admit that the whole purpose of NFTs debuting in mainstream muggle culture is a bit beyond me, but it is that we are better equipped to know the muggle world if we understand their customs, no matter how weird they are. So read chapter 6 and write me a piece of parchment about 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 in relief.

Professor Burbage: Class rejected!