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What is a non-fungible token (NFT), and should Christians buy them?

non-fungible token, NFT

A non-fungible token (NFT) is a digital receipt. “Non-fungible” means the token is one of a kind. A dollar bill is fungible because every other dollar bill is worth the same amount; an original piece of art is non-fungible, as its value depends on the artist, the condition, the year it was made, the size, and the type—aspects that are unique to that piece. The “token” is the unique digital verification of purchase and ownership. Non-fungible tokens are one aspect of a new digital investment system, but the term NFT is sometimes used to refer to the entire system.

Non-fungible tokens are part of a blockchain—a digital record of transactions—that provides addresses to webpages that describe the item and the ownership of that item. Each token includes a unique code that cannot be altered within the blockchain; thus, it is “non-fungible.” As a digital receipt, an NTF is not necessarily the item itself. Nor does it prevent a real-world item or digital file from being stolen or copied. Early experience with NFTs has shown that fraud, theft, and illegal copying are still possible. Digital assets, unlike tangible items, are also susceptible to server crashes, computer bugs, and unpaid web hosting bills. Christians should seriously consider whether investing in the NFT market is how God would want them to use their money.

That careful, prayerful approach applies to all forms of wealth management. In Matthew 6:19–21, Jesus gives this investment advice: “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”

Jesus was referring to real-world things like clothing and food. NFTs, ultimately, are valuable only when they are tied to something valuable. The same spiritual principles concerning wealth apply to digital receipts as much as to electronic bank accounts, paper money, gold bars, or stockpiles of food and gasoline.

Non-fungible tokens are applied when the seller offers an item for auction. The digital auction house does not have possession of the item, just the authority to sell the item and provide a certificate of ownership. When the buyer purchases the item, typically using the cryptocurrency Ethereum, a block on the blockchain permanently stores the certification of ownership on many users’ chains—even users who have nothing to do with the transaction. Items tracked by NFTs can be digital or real-world.

The sale of digital assets like software and data has been a staple of the computer industry for decades. Since shortly after computers were designed to use internal software, the industry has developed a market for only-digital items such as games, programs, and files. With the proliferation of the internet, users have created content to share freely, like photos, memes, videos, and audio files. The digital marketplace has expanded, as well, to include not only games but in-game purchases like weapons and “skins” or character costumes.

For digital assets, providers create a digital item, like a meme, a child’s drawing, a 3-dimensional representation of a house, an audio file, an essay, or a Tweet. The purchase information is recorded in and validated by an NFT. Even if the digital representation of the item is ubiquitous on the internet, the buyer technically owns it; often, the more popular and copied the asset, the more valuable the certificate of ownership is, even though the owner earns no money for its use. The block that verifies the purchase typically includes two website addresses. The first has a record of the sale and a detailed description of the item—its provenance. The second is the online location of the item.

Non-fungible tokens can also represent real-world items such as concert tickets or vehicles. Sometimes, the asset is a virtual/real hybrid such as the AI-designed tennis shoe called X Evolutions, a pair of which recently sold for over $13,000 (, accessed 1/19/22).

The entire system has one great advantage and a couple of serious drawbacks, particularly with digital assets. The advantage is that, since the sale is recorded on the blockchain, the record of the transaction is copied on multiple chains that cannot be altered. The blockchain is decentralized, not controlled by a central market like Facebook, Epic Games (Fortnight), or Apple. The token will not disappear if a server crashes or a company upgrades its system.

Unfortunately, the digital item itself is not so safe. It is stored on a server; if the server crashes, the digital property is lost. If the format is no longer supported (à la Flash Player), it may not be accessible. If the owner of the URL redirects the link, it will be inaccessible. If the site that stores it decides the item goes against their terms of service, they may delete it. Or it can be lost if the owner of the domain neglects to pay the web host. In some cases, the asset owner may negotiate for ownership of the site and maintain it personally. Or the asset could be placed on an InterPlanetary File System so it is stored on more than one server. It’s possible the NFT society could agree that a digital file holds value even if the file referenced by the NFT no longer exists but a copy exists on the internet somewhere else. If no copy exists, the investment will likely be worthless.

In addition, although non-fungible tokens cannot be altered on the blockchain, the assets can be stolen, placed on a different server, and resold under a new NFT. Since the NFT system, like cryptocurrency itself, is not centrally regulated, victims have no authority that can help them. They have to rely on the altruism of the community—a community that intentionally invests in non-regulated assets and may just as likely respond with criticism that the owner didn’t properly protect the asset.

The most significant disadvantage of non-fungible tokens from an investment point of view is that the value of digital assets is completely arbitrary. They’re only worth what the community decides they’re worth. Of course, this is not unique even among physical things like art, trading cards, figurines, and model tractors. There’s no real reason a Pokémon card should be worth $25,000. The NFT community places a great amount of value on these digital assets; as of January 2021, digital items were a $10 billion market; NFT sales reached $10.7 billion in just the third quarter of 2021 (, accessed 1/19/22).

Of course, growth doesn’t mean the NFT market is going to continue the same trajectory. Combined with the other disadvantages of non-fungible tokens, investment in digital assets may not be a good idea. All investments include risk, from stocks to property to gold. Determining what to do with money also requires wisdom. The Bible recognizes the tension between meeting real needs, enjoying God’s blessings, wisely investing, and meeting others’ needs.

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What is a non-fungible token (NFT), and should Christians buy them?
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This page last updated: January 19, 2022