If you have talked to anyone in 2021, you have heard the term NFT.
Cryptocurrencies used to be the strangest trend online, from GameStop to Dogecoin but these days NFTs have taken over.
NFTs (non-fungible tokens) have become the trading cards of the future and thanks to the headline-grabbing insanity of it all- memes are being sold for the cost of a Tesla, old tweets are getting seven-figure bids and digital art selling for $69 million.
In simple terms: Non-fungible assets are those that aren’t interchangeable with one another. Every $100 bill holds the same value as any other $100 bill, therefore they are fungible.
Real estate, art and collectibles are non-fungible — houses of the same size on the same street will sell for different prices.
Which brings us to non-fungible tokens, which are essentially certifications of ownership recorded on a blockchain.
To put it simply, NFTs, or non-fungible tokens, are unique digital objects that bear a certain value based on the object’s uniqueness. This object can be a painting, a video, an audio snippet, a video game collectible item, a GIF, and more! Considering that they are unique units of data on a blockchain, NFTs are not interchangeable.
In the age of NFTs, downloading a picture is like owning a print. Having the NFT is like owning the original painting.
Real digital artists are making real money on NFTs. Take Beeple whose NFT recently sold for $69 million in a Christie’s auction!
This is my favorite part of the NFT space, seeing the insane ideas people have and how well received some of these ideas are!
Let’s take a look at a few of the craziest NFT sales:
“Just setting up my twitter,” tweeted Jack Dorsey, co-founder and CEO of Twitter, back in 2006. Turns out that each of those words is worth over $580,000, as the NFT for that tweet sold for $2.9 million.
There are over 10,000 collectible characters known as CryptoPunks on the Ethereum blockchain. Released by the two-member team Larva Labs, each of these characters is unique from one another in terms of their traits. The algorithm-generated pixel art images have been in circulation since 2017.
CryptoPunk #4156 is one of the 24 Punks who have the ‘ape’ characteristics. This particular character also sports a blue bandana. According to NFTS Street, as of 18th February 2021, the artwork was sold for $1.25 million to the address 4156.eth.
Charmin (yes the toilet paper company) issued six weird NFTs and put them on Rarible. Each one of those NFTs is some kind of toilet paper roll created by famous artists. Every piece came with a physical painting as well. They were sold for 3.221 wETH (around $7,315 today) in total.
So what’s next for NFTs?
Well the interesting thing about NFTs is they have yet to demonstrate their ability to retain value over time and NFTs remain highly illiquid as purchasing/selling one is pretty easy and users are purchasing NFTs that speak to their interests.
Although NFT technology has been around since 2014, it is just beginning to be put to the real-world test. Because NFTs run on a blockchain, they could offer potential for uses beyond art and collectibles.
In theory, NFTs could offer efficiency and security through embedded smart contracts. However, the NFT market remains very new, and questions about rights, ownership, intellectual property, and more have not yet been fully explored.
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