What is all the fuss about non-fungible token art?
At the start of this month, an NFT – Everydays — The First 5000 Days – was sold for an eye-popping, record-breaking sum of $69,346,250. As you must have guessed, it created a widespread buzz online as the crypto community went into overdrive.
In no time, every artist, tech, and business-savvy person was googling what an NFT is. You are probably reading this, too, for the same reason.
At $69.3 million (£50M), the JPG image created by world-renowned artist Beeple is the third most expensive item bought at an auction by any living artist. What makes this sale even more interesting is the fact that the said artwork does not exist physically. It doesn’t make sense, right?
That’s because this art piece is a non-fungible token (NFT).
Trust this kind of news to catch the attention of the world’s elites like Elon Musk. The industrial designer, business magnate, engineer, and world’s richest man decided to join the fray by selling a song about NFTs as an NFT.
In the most surprising twist of the day, Beeple offered $69 million for it, but we’re yet to see if he’ll go through with the bid.
This new form of crypto art called NFTs exploded on the art scene at the turn of the year, and it has completely changed how we know and use art. Many artists from Beeple to musician Grimes, tech entrepreneur Jack Dorsey and a horde of other low-key players are cashing in on this trend.
Grimes, for instance, sold her NFTs (10 digital images) for over $6 million in February. A few weeks before, the legendary animated “Nyan Cat” of comic artist Chris Torres brought in nearly $600,000 at an auction.
In February, Lindsey Lohan made headlines when she sold a Daft Punk NFT for $15,000. She also sold an image of her face initially put up for sale at $17,000, but it was resold for $59,000. Recently, Twitter’s founder, Dorsey, turned his first-ever tweet into an NFT. As we speak, bids for the tweet have reached an unbelievable $2.5 million.
If you think NFT trading is only a hit for celebs and big-time artists, you’re sorely mistaken. According to recent estimates, the market is worth over $338 million, having grown 705% within the last three years.
Total value of NFT transactions rose from $62,862,687 in 2019 and almost quadrupled to $250,846,205 in 2020. In the first two months of this year, nearly 150,000 NFTs worth $310 million (almost 5x the sales figure of 2020) have been sold.
These sales are not from big names alone. Mid-tier players and small-time sellers and buyers have also had their fair share of the pie. By now, we’re sure you want to know more about NFTs, their impact on art, artists, and how to get involved. Don’t worry; we’ve got all that covered here.
This guide also includes bonus sections that show hidden pitfalls to avoid to ensure you have a profitable NFT ride and new opportunities to watch out for in the sector.
What are non-fungible tokens?
Non-fungible tokens (also called blockchain non-fungible tokens or NFTs) are a form of digital asset and cryptocurrency, just like Bitcoin and Ethereum. They differ from crypto coins because they represent artwork, music, videos, collectable cards, virtual land, video games, collectibles, and funnily enough, tweets.
Even though NFTs can’t be seen physically, they are still considered attractive investment options, like other tangible and intangible valuable items. Also, their value is primarily determined by demand and the market.
The term “non-fungible” in the name NFT implies that each asset is unique, and you can’t exchange them with one another since their value differs. For instance, if you have 2 Bitcoin, they’ll have the same price across the board at all times.
Likewise, a one-dollar bill can perfectly interchange with the next one-dollar note since they always have the same monetary value. This is not so with non-fungibles. Each one is unique in and of itself as they…