Non-fungible tokens (NFTs) are all the craze right now, they are a technological innovation that aims to bring collectables (not only) to the digital marketplace.
Recently, Christe’s auction house sold a digital-only artwork for a sum of $69m. And the interesting part is the bidder will not receive any physical goods, only digital artwork for him to keep (and I’d imagine it’ll be his phone’s lock screen background for a long time).
So what are NFTs?
NFTs are best described as digital tokens, very much like cryptocurrencies such as Bitcoin, they use Blockchain technology to certify these digital tokens.
Blockchain technology, in essence, makes use of computer networks to check transactional details and document them in order to certify ownership of an asset.
What makes Blockchain so innovative in the financial world is the resistance to which data cannot be modified.
Thus, just as cryptocurrencies are considered secure, so are NFTs.
Differently from cryptocurrencies, NFTs are non-fungible, meaning they are not readily interchangeable. As they are “unique” they are not fungible.
What can be an NFT?
Anything that can be a digital asset! This can be an image, song, video, or even a GIF. As long as it is unique, and therefore sellable, it can be an NFT.
A great example of this is the game CryptoKitties. Where you own one-of-a-kind kitties that are collectable and breedable. Using Blockchain technology, CryptoKitties cannot be replicated, stolen, nor destroyed.
So it is mine forever?
Yes! Well, kinda yes, but that isn’t the entire gist of it.
By buying an NFT you get ownership of the digital asset. And you are free to re-sell it if you so desire.
However, this does not mean you get the copyright of the digital asset, just the asset itself.
Let’s look at some examples of record-selling NFTs
Jack Dorsey’s first tweet up for sale
Jack Dorsey, Twitter co-founder and CEO is auctioning his first tweet as an NFT and donating the proceeds to charity. As of writing, the auction’s highest bid is $2,500,000. If you’d like to check it for yourself, follow this link.
The sale will grant the buyer a certificate of ownership of the tweet. However, the tweet is still publicly viewable and likely will stay that way.
Internet persona Elon Musk gets in on it
Giving it his own finishing touch, Elon jumps on the NFT craze with an electronic music track about NFTs.
While backtracking his initial intention to list the song as an NFT, the track has had its influence on the online community. Elon Musk himself saying he turned down a $1.1m offer.
One of the largest (in volume) sellers of NFTs has been memes. Internet memes, which are viral phenomena, succeed through “word-of-mouth” per se, making them a not-so financially viable solution to original creators other than the credit that comes with it.
With NFTs, there seems to be a new source of revenue in the online meme economy.
NyanCat, the beloved and iconic meme is turning 10 in April, and to mark its occasion, the iconic gif has been sold on auction. With a bidding price of $545,859.00.
Currently, an auction is running for the “Deal with it” glasses, going for $27,252.45 at the time of writing.
And if you think these prices are too high, how about you just
All in all, we can come to a quite clear conclusion about NFTs. They’re an up & coming financial tool for art to be sold and collected on the web. And thanks to blockchain technology, it can be considered safe and secure.
If you’re an artist, content creator, or influencer, your eyes should eye on this lucrative business as a new source of revenue.
And if you want to get in on the craze as a buyer. Who knows, maybe your NFT will increase in value over time and you’ll be able to turn a profit in this ‘collectables’ market.