Non-fungible tokens have been around since 2014, but I bet you haven’t heard of them until this year. As part of the crypto craze, these NFTs are spending millions of dollars and expanding into everything from original art to tacos.
NFTs are digital assets. For those like me, who are old enough to be grandparents and who may still read newspapers, the concept of digital asset may not be so intuitive.
âNon-fungibleâ means that this is a unique asset that cannot be replaced by anything else.
NFTs are bought and sold online (usually with cryptocurrency), and stored and encoded in the same way. The difference is that cryptocurrencies, such as Bitcoin, are fungible and can be traded or replaced with another bitcoin. These digital assets can include everything from original artwork, videos, and music, as well as collectibles such as e-sports cards, game items, and anything sellers think is of value. for the spending public.
Most NFTs are bought, sold, and supported by the Ethereum blockchain. Ethereum, for those who don’t know, is both a cryptocurrency, like Bitcoin or Dogecoin, but also offers a sophisticated, state-of-the-art blockchain that stores additional information needed for all kinds of digital transactions, including the treatment and treatment of NFTs.
Ethereum isn’t the only game in town, however. There is a growing list of competitors who have entered the market as well. They function as a marketplace where NFTs can be stored, displayed, traded, and in some cases created. These marketplaces are to NFTs what Amazon or eBay are to commodities. So how do you get there?
You must have a crypto wallet. If you are already buying or selling cryptocurrency, you probably already have one. But, it must be compatible (and pre-funded) with a blockchain that supports the NFT you want to purchase. NFTs are usually bought at a fixed price or through an auction like on eBay.
The purchase includes built-in authentication, which serves as proof of ownership. Each original object has its own digital signature which makes it impossible to exchange or exchange for something that may look similar but is not. Therefore, the buyer can never be stuck with a fake copy of something, like a digital Mona Lisa.
Today, although there are many types of marketplaces, universal and art-oriented platforms are the most popular. There are also some good niche players who specialize in things like collectible cards, virtual real estate, and in-game items.
Some items sold for substantial sums, such as a tweet from Jack Dorsey, the founder of Twitter, which sold for almost $ 3 million. Large companies are also starting to enter this market.
A number of Fortune 500 companies are engaging in NFTs as part of their marketing strategies. Visa, for example, paid $ 150,000 for âCryptoPunk,â which is just one of the thousands of NFT digital avatars listed for sale. Nike has patented a method to verify the authenticity of sneakers using an NFT system called CryptoKicks. Marvel, the home of so many superheroes, has launched their own NFTs, as has Wayne Gretzky.
Then there’s âBeeple,â a digital artist whose real name is Mike Winklemann, who rose to fame when Christie’s, the art auction house, announced that it was selling a digital work of him. The auction attracted 125 bidders and the work sold for $ 69 million. It was $ 55 million more than Monet’s painting “Nympheas”, which sold for $ 14 million in 2014. A video by the same artist grossed $ 6.6 million.
The clip art of a rock just sold for 400 ethers, or about $ 1.3 million. The transaction marks the last sale of EtherRock, a brand of crypto collectibles. EtherRock is a JPEG of a cartoon rock, built and sold on the Ethereum blockchain. There are only 100 available, which I guess is part of the attraction.
What makes cartoon rock (not even real rock) worth? Its rarity value. In a world where the supply of most digital creations is endless, NFTs stand out because they are usually original and unique works of art. Of course, like any product, there is an implicit assumption that there is a demand for the item on sale.
The owners of NFT take the risk that no matter how many times you can download a copy of their original, it’s not the same as owning the real McCoy.
Frankly, you won’t see me lining up to buy a virtual rock anytime soon. To me, it’s no use, I can see, beyond its ability to be bought and sold. I guess it might give you a sense of pride and maybe the right to brag about owning one of the 100 rocks of this type, although I doubt I want to brag about it.
However, don’t dismiss NFTs too quickly as just another craze. For the starving artist, for example, it is an avenue (without intermediary) where he can sell his works directly to the public and earn a living. I believe that in the years to come, cryptocurrencies and other electronic currencies, blockchains and the like will replace existing trading systems as well as transaction regulations.
As the world continues on its journey to a digital reality, NFTs could grow and become an accepted part of this brave new world. As we’ve replaced the oversized travel photo books ubiquitous on our coffee tables, our vacation slideshow and even our family photo albums with digital keepsakes, is it so hard to believe there will be a market for them? TVN?