The NFT business is booming with new projects sprouting every day, but the big question is: why are they so valuable?
What is An NFT?
An NFT, Non-Fungible Token, is a digital asset that contains unique features that can not get interchanged with anything else. Fungible Tokens, on the other hand, can be exchanged, for instance, money. Twenty dollars is interchangeable with two 10 dollar notes.
Examples of NFTs include; Cryptopunks, Bored Apes, Pudgy Penguins, NBA Top Shots, a domain name, Axie Infinity, and so much more.
NFTs records live on a Blockchain, also referred to as a Digital Ledger. Ethereum is the leading blockchain when it comes to housing NFTs.
How Do Non-Fungible Tokens Work?
Similar to the current and subsequent owners, the original creator of an NFT is traceable. The recorded information is not forgeable because it gets stored in thousands of computers across the globe.
The blockchains also store contracts that ensure the artists get pay during future sales surrounding the artwork. NFTs get tokenized to prove the originality of the projects, and owners get a digital certificate used to buy and sell.
How Much Do Non-Fungible Tokens Cost?
Below are some examples of the many NFTs project sales conducted;
- Canadian singer and songwriter The Weekend made close to 490000 USD after selling previously unreleased music as tokens.
- Kevin Abosch, an Irish conceptual artist and Crypto art pioneer, made some top-notch deals, including selling a potato’s image for a million euros. In 2018, he sold his rose image on valentine’s day and hit the million mark again.
- Nyan Cat, a 2018 animated project (inspired by the designer’s cat), sold for half a million dollars.
- Cryptopunk #6487 sold for more than a million dollars in February. The funny part is that female punk wasn’t that rare.
- You might think Beeple was very famous, but you’d be wrong. Despite being unpopular, the artist’s Everyday’s: the first 5000 days sold as the most expensive artwork in the digital market. The bid started at 100 dollars and finally got sold for a whopping 69.3 million USD. The bidding took place at an auction house called Christie’s.
There are millions of sales carried out in the NFT space. The good thing is that anyone can Mint and sell an NFT. Basic computer knowledge and crypto skills can take you a long way.
Why are NFTs Booming?
NFTs started in 2017 with Cryptokitties as the first project.
In 2018, platforms to buy, sell, and even mint NFTs were created. Some examples include Opensea, Rarible, and Nitty Gateways.
2019 then saw big brands like Nike join the NFT space. To date, the NFT market has and is still expanding.
The Value of an NFT gets determined by several factors. Some of these factors include; authenticity, scarcity, ability to transfer, utility and immutability.
New projects aim to make NFT trades simpler so that even those people without cryptocurrency knowledge can invest.
The global pandemic and economic turmoil are some factors leading to the crazy growth of the digital market. This year so far has witnessed a massive explosion in terms of digital trade.