You’ve probably heard of NFT, which is short for non-fungible token. They’re tied to almost anything nowadays — a. But what are they? Think of NFTs as a digital asset that is expensive but could make you a lot of money in the future – similar to cryptocurrency but not quite (more below). Or they can’t.
Today Time Magazine will launch over 4,500 NFTs from over 40 artists. And this afternoon, Tiger Woods plans to sell NFTs of digital autographed collectibles (more below). If you are looking to buy an NFT, the starting price can be cheap but the bidding battle for the NFT can make the digital token more valuable. The interest has created a digital market that has claimed $250 million in sales in 2020, reaching new levels of hype from NFT Visa, Warner Music Group and Nike.
For you, you are not alone. In essence, NFTs provide a blockchain-generated certificate of authenticity for a digital asset or piece of art. still confused? We’ll explain what NFTs really are, how much they cost and how you can bid on digital assets to have your own NFTs.
What is NFT?
This is the part that is a little open-minded. NFT is a unique digital token, used in mostBlockchain to record transactions digitally. It is not a cryptocurrency like bitcoin or ethereum, as they are interchangeable for other bitcoins or cash. NFTs are recorded in a digital ledger in the same way as cryptocurrency, so there is a list of who owns each.
What makes NFT unique is the digital asset associated with the token. This can be an image, video, tweet or piece of music that is uploaded to a marketplace, which creates an NFT to sell.
If I have NFT, do I have assets?
That’s the real kicker to understand the whole concept. The person buying the NFT is not the owner of the real asset.
Jeffrey Thompson, associate professor at the Stevens Institute of Technology in Hoboken, New Jersey, said, “NFTs challenge the idea of ownership: digital files can be infinitely reproduced and you (usually) have the copyright when you buy an NFT. Or don’t buy a license.” .
For example, the producer ofIt sold one NFT for $590,000. The person who bought the token has the token, but does not actually have the meme. He still belongs to the producer, who held onto the intellectual and creative rights.
The owner of the token has a record and a hash code indicating the ownership of the unique token associated with the particular digital asset. People can download Nyan Cat and use it on social media if they wish, but they will not have the token. This also means that they cannot sell tokens as owners.
Why are NFTs so expensive?
With physical collectibles such as Beanie Babies, baseball cards and toys, there is a market for NFTs. Buyers tend to be tech-savvy individuals who crave the idea of buying digital goods and probably made a killing with cryptocurrencies last year. Ethereum, for example, moved up from just $100 last March to its current price of around $3,400. In some cases, buyers are simply flexing their digital wallets to show how much crypto they hold, but for others, there is a keen interest in it.
“There has been a huge increase in demand, especially for art-related NFTs, due to their innovation and the creativity of early artists,” Jason Lau, chief operating officer of crypto exchange OKCoin, said in an email. “Whether it is a physical work with NFTs attached (think of it as a digital autograph and proof of veracity), or an entirely digital work (where NFTs are art), this new medium is opening up new avenues for collectors and artists. explore the artwork itself as well as their relationship.”
It’s also great for artists, Lau says. By selling digital art directly to those who are interested, an artist can start working without trying to sell it in a gallery.
What kind of NFTs can I buy?
NFTs can be linked to any digital asset. Everything you see online can be NFTs – music, social media posts, clip art and more. Today, Sorare released its “Super Rare” Lionel Messi digital trading card which is currently bidding at €29,992.75, which is equivalent to over $35,000. Sorare also announced that it has raised $680 million for its next level sports fantasy game. The funding is currently led by SoftBank.
Tiger Woods will sell thousands of digital collectibles on autograph on the DraftKings Marketplace. Signature collection launch Today, 23 September. The premiere collection was released on Tuesday for $12 each but has already sold out. Today’s collection starts at $250. Naomi Osaka, Derek Jeter and Tonk Hawk are also releasing digital collections on Autograph, which is founded by Tom Brady.
But NFTs are going far beyond the game. Recently, Fortune offered its readers a chance to join the NFT craze. The company sold 256 copies of a limited edition cover from graphic artist ppplacer for Fortune’s August/September magazine on OpenSee. Copies sold out within five minutes starting at $1 Ethereum (estimated at $3,000). But NFTs were available for resale at three times the cost.
And in August, a clip art of a rock, known as Ether Rock, was sold for $400,000 in Ethereum (estimated at $1.3 million). It was priced at $97,716 two weeks ago. And in August, Visa announced its NFT CryptoPunks purchase in Ethereum for $150,000. The Financial Corporation believes that NFTs play a large role in “the future of retail, social media, entertainment and commerce”. And Vine’s co-creator, Dom Hoffman, is reportedly exploring a new way to gamify NFTs with his fantasy gaming console, supdiv.
As the hype for NFTs grows, it is expected that more digital assets will come up for sale and bring in some huge funds.
Where can I buy or sell NFTs?
While you may not want to jump right into six-digit bidding, there are several NFT marketplaces, with OpenC being the biggest. Buyers can discover art, domain names, and random collectibles without breaking the bank. And Woods’ digital collection is one of several NFT collections available on the DraftKings Marketplace, which also includes Tony Hawk’s collection.
On the other hand, if you want to sell NFTs of your art, you can use NFTify, Shopify NFT Store to sell NFTs without creating your own store. You will also need a MetaMask account to proceed. And Burberry recently announced a partnership with Mythical Games to buy, sell and collect toys as NFTs through the Blancos block party game. Nerdshala’s own Chris Parker has also created a step-by-step guide on how to build and sell your own NFTs in the video below.
What are the disadvantages of NFTs?
One drawback is the hundreds of dollars in fees required to create an NFT. If you are building your token on the Ethereum blockchain, you need to use some Ethereum, which as mentioned earlier is quite expensive. Then when you create NFTs, there is a “gas” fee that pays for the work that goes into handling the transaction and that too based on the price of Ethereum. Marketplaces simplify the process by handling everything for a fee when NFTs are sold.
There is also an environmental cost. Like bitcoin, Ethereum requires computers to handle the computations known as “mining,” and those computer tasks require a lot of energy. An analysis by Cambridge University found that mining for bitcoin consumes more energy than the entire country of Argentina. Ethereum is second only to bitcoin in popularity, and its power consumption is increasing and equals the amount of energy used by Libya.