NFTs are widely misinterpreted in the press, but they are easy to understand when not played up for laughs. NFTs represent a new form of collectible, like baseball cards.

Like a baseball card, nothing stops you from having your own picture of Honus Wagner. And, there is nothing intrinsically valuable about the Honus Wagner card. What matters is that only the physical owner of the card "owns" it, and that there are only a few copies. NFTs are like that, except instead of physical ownership, the ownership is cryptographically determined. Exactly how it happens doesn't matter. If you can understand baseball cards, you can understand NFTs. Baseball fans attach meaning to the copy and that's where the value comes from.

The first sets of baseball cards are far more valuable. NFTs are experiencing their extreme climb in value because some of these first iterations of NFTs are expected to be "Honus Wagners," and their collectors are already rich from crypto. So the prices are high and this is why the press is talking about them.

"Collectible" NFTs are merely the first instance of non-fungible tokens to gain real traction, similar to how the first use of programmable cryptocurrencies to gain traction was the recursive minting of other cryptocurrencies. Neither of these applications is especially complex, but they exploded because they gave an outlet to pent up demand. Down the road other applications will follow.