Grimes getting millions of dollars in ‘digital art’ sales, thousands of dollars for pictures of cats, house money for a clip-art of rocks, fan tokens to sign the world’s best football player and Twitter founder Jack’s first tweet for sale, this is the world of NFTs.
But many still don’t understand what all the hype is about.
So, I thought I could help you lot out.
Starting with the basics.
What are NFTs?
An NFT is a non-fungible token.
A non-fungible token means that the item cannot be replaced with something else. It is unique in a sense. A trading card, say a very expensive original one, for instance, is non-fungible. This means that while you can trade it for another card it would be a different one, nothing at all like the one you had.
Bitcoin on the other hand is fungible. You trade one bitcoin for another and you would have exactly the same thing.
Right. So, this means NFTs can’t be copied.
Not exactly. And here is where matters get a little sticky. You see NFTs are digital files and they can be copied, as many times as you want. Just click on the ‘Save As’ button on your browser and voila!
NFTs however are designed to give you something that can’t be copied. The right of ownership, if you will. Think of it in terms of art, you can buy a copy of say, the Monalisa, but only one person has the original.
How do they work?
NFTs are based on the Ethereum blockchain; a cryptocurrency like Bitcoin or Dogecoin. Using this technology each NFT can is made unique with its own markers.
So it is like art collecting.
Yes. That is the hope. At least people like the one who paid $6.6 million for a video by Beeple seem to think so. In fact, another image from Beeple was sold at a whopping $69 million. In contrast, Monet’s painting Nympheas sold for $15 million less in 2014.
Why are they so expensive?
Like any market, nothing makes sense. But really, it depends on what you plan to do with the item.
Here are the common players.
These are the real creators. NFTs make it possible to make money by selling their original work to a prospective buyer. Moreover, NFTs have a feature that pays the artist a percentage every time the item is sold. This will keep the artist paid as the item’s value grows in popularity.
Buying ‘art’ or NFTs is a good way of supporting artists you like. Plus, you get the added advantage of being able to post these images or just basically use them however you like.
Probably make the biggest bunch of the lot. They buy NFTs in hopes of selling them one day when their value will be (hopefully) higher.
Ultimately, however, what determines the price of an NFT is a little unclear. While some may treat them like fine art, others treat them like trading cards that can be exchanged at any time.
Does that mean that any digital asset can be an NFT?
Well, technically yes, any digital asset can be sold as a token. Even articles, (though I already own this one.) Articles on Quartz and The New York Times go for anywhere from $1800 to $560,000.
Where can I buy and sell NFTs?
With their growing popularity, there are now several platforms where you can buy and sell NFTs. The most popular ones include Rarible, OpenSea, Nifty Gateway and Grimes’ choice.
With this, I think you are good to go. Get your NFT marketplace and start selling!