Digital assets are becoming the next ‘big thing.’ It is impossible to ignore their exponentially growing popularity. Ever since the 2000s and the explosive growth of software applications, and the rapid growth of blockchain-based asset space during the 2010s, the universe of digital assets is today bigger more than ever.
Although the NTFs have been on the network since 2014 and in trade since around 2017, these tokens are gaining their fame on the world stage over the last few years. Still, the NFT market gained all attention in early 2021. The reason for that is their increased utilization to buy and sell digital artwork. According to the statistical data published by Statista Research Department, as of December 15, 2021, an astonishing 147 million U.S. dollars were the aggregated sales value over 30 days.
What Is an NFT?
NFT is an acronym for Non-Fungible Token.
What’s Actually an NFT?
A non-Fungible Token or NFT is a digital asset used to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. Worldwide, millions of dollars are circulating this way basically 24/7.
What is “Non-fungible”? Fungible refers to its uniqueness and cannot be replaced with something else. Not even with another token. For example, bitcoin is fungible, meaning one bitcoin can be traded for another bitcoin, and the buyer/ seller will have the exact same thing that is subject to exchange. On the other hand, NFT is a one-of-a-kind trading card, which means if you trade it for a different token, you will receive something completely different. An NFT can be unique as a real-life painting or one copy of many, like trading cards, which are regulated within the blockchain by keeping records of who owns the file.
What Does NFT Stand For?
The Non-Fungible Token represents whatever value their creator will appoint to them. So, basically, the NFT can be described as data on a digital ledger. The systems of recording information for NFT usually are blockchains or networked computers and have logged a unique signature of ownership of that asset. The point of owning NFT is to provide a public certificate of authenticity or proof of ownership to verify the authenticity, whether intellectual property rights, a ticket to an event, or even plots of land in virtual world environments. Today, NFTs most commonly exist in forms like images, drawings, animated GIFs, videos, music, items in video games, and text. Also, NFTs can be digital clothing, exclusive use of a cryptocurrency wallet name. Even tweets can be bought and sold as NFTs, such as when Jack Dorsey, CEO of Twitter and Square, sold his first tweet as an NFT for a staggering $2.9 million.
The blockchain contains data for transactions, and the NFTs are usually bought with cryptocurrencies. However, sometimes individuals decide to buy them with dollars or fiat currencies.
What’s the Point of NFTs?
NFT can be considered as a prized possession in a virtual environment. For some individuals, owning NFTs is prestige, a way to determine their social status and personal taste in front of the entire internet community. Spending millions of dollars for tokens that may not even be real is tricky. This type of action is definitely for individuals who have extra money to spend and are ready to take a considerable risk.
Seen in terms of investors, NFTs are tempting. Buying and selling NFTs is attractive and risky. Precarious access may or may not bring good returns on trading. Interestingly, buyers can earn huge profits within a few days or even hours by purchasing NFTs. It is essential to highlight that NFTs are not guaranteeing sure and all-time constant profit. Like cryptocurrency, NFTs are unregulated, and it is impossible to define their value precisely. If at some point, the hype for NFT dies all of a sudden and is not excluded that this may happen tomorrow, in a year, ten years, the losses can be enormous. Still, the opposite development of events is possible, and the prediction is that NFTs have a bright and stable future.
NFTs and Catchy Headlines
NFTs draw immense attention, and lately, this phrase has been making headlines. Some of the most striking transactions are buying NFT of his artwork from the digital artist Mike Winkelmann known as Beeple. Namely, the digital collage of images was sold for more than $69 million at Christie’s (British auction house) auction in March 2021.
Beeple’s pieces are a regular among the most expensive NFTs ever sold. The price ranges between $6m to $69.3m. Beeple can get the title of the most significant digital artist in NFTs since he holds four out of ten most expensive NFTs ever sold (Ocean Front — $6m; Crossroad — $6.6m; HUMAN ONE — $28.985; Everydays: the First 5000 Days — $69.3m).
CryptoPunk is an NFT collection on the Ethereum blockchain and holds four out of ten places on the top 10 most expensive NFTs list. The lowest amount is $5.59m and with $11.75m, (CryptoPunk #5217 — $5.59m; CryptoPunk #7804 — $7.6m; CryptoPunk #3100 — $7.67m; CryptoPunk #7523 — $11.75m) it makes it most expensive CryptoPunk in the world.
Eighth on the list is XCopy’s A Coin for the Ferryman, a GIF form sold for $6.034m.
First on the list officially is Pak’s ‘The Merge.’ On December 2, 2021, this piece was sold for $91.8m, with almost 30,000 collectors pitching together for a total cost. This is the only piece of the top 10 list with multiple owners that shows how insane the price tag can become.
Speaking about headlines, the discussion about the massive electricity use and environmental impact of NFTs draws attention. When it comes to nature preservation and the impact Bitcoin mining has on the environment, it is our responsibility to ask questions. The following article will discuss the climate controversy swirling around NFTs.