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NFT stands for “Non-Fungible Token”. These tokens use the Ethereum blockchain to store data and serve as a kind of certification. The “non-fungible” in NFT stands for the kind of digital goods that the certificates are used for. These are unique products and assets that cannot be replaced or interchanged. So, here’s where the art comes in.
Due to the features explained above, NFTs have become increasingly popular for trading digital art pieces in recent months. The blockchain-based tokens allow the copyright owner to be identified and verified on a public record. NFTs are unique, cannot be swapped for other tokens and can’t be manipulated. So in short, NFTs are a new way of proving copyright and trading ownership.
But what is the hype about? NFTs have been around for more than two years and have been gaining lots of traction. That is because one art collector sold his NFT of a ten second long video clip for $6.6 million. He only bought it in October 2020 for $67,000.
Why would anyone pay that much money for a piece of art that can be looked at for free online? Well, the same applies to physical art that you can see in museums but which you don’t own and have no right to reproduce. Thus, NFTs are all about the ownership and copyright of a piece. Plus, stealing copyrighted content has always been an issue on the internet and NFTs are a way to make things more transparent.
The fact that the video clip by digital artist Beeple sold for such a high amount has caused a frenzy and more interest in investing in digital art. Another noteworthy NFT sale is Nyan Cat. The meme was auctioned for nearly $600,000 in February. As mentioned above, visual art is not the only asset that can be traded via an NFT. Basically, any type of content can be sold via a token. Twitter founder, Jack Dorsey, is currently auctioning off his first tweet, and rock band Kings Of Leon are selling special editions of their new album via NFT.
But fear not, you don’t need millions or hundreds of dollars to get into NFT trading. NFTs are commonly sold on marketplaces like Super Rare, Nifty Gateway or, if you are looking for digital basketball memorabilia, NBA Top Shot. Typically, transactions are made via the Ether currency.
Even if you are not sold on trading digital assets like these, it shows how versatile NFTs can be. For now, lots of new artists sell via NFTs to spread the word and lots of traders are trying to make big returns by reselling their tokens. The technology is here to stay though, so NFTs are definitely a space to watch.