NFT is a buzzword that most of us are probably familiar with. If you have been living under a rock for the last few years, it should come as a surprise that people have been ‘investing’ (?) millions of euros in NFTs. Some even believe that NFTs will forever change the future of art collecting.
After all, what is an NFT?
First, the very basics: NFT stands for Non-Fungible Token. Basically, it means that it is something unique and not directly replaceable with another digital asset.
These unique assets can be anything that is represented digitally: images like drawings, photos, GIFs, and memes, but also music, videos, virtual avatars, or other forms of digital art. Even tweets count. Twitter co-founder Jack Dorsey sold his first ever tweet as an NFT for more than $2.9 million USD. These files live on the blockchain and store information that allows you to verify their ownership.
Creating an NFT is called minting. When a digital file gets minted, an NFT is generated and stored on a blockchain.
Each NFT contains a built-in signature that certificates its authenticity and any related transactions on the blockchain – the creator, the person who linked it to the blockchain, the owner, and the ones who bought it throughout its history. All the changes are made public, so it becomes pretty difficult to trick the system when it comes to an NFT’s history. On the other hand, the cryptocurrency marketplace is in a way subject to security flaws and scams due to its essentially anonymous and unregulated nature.
These days there is a ton of hype around these digital goods. But what is the utility of NFTs if anyone can copy and share a digital file, including the ‘art’ of an NFT worth millions of dollars, as many times as they want? Aren’t they ‘just images’ after all?
Wait, can’t you just copy and paste an image?
Yes, but in theory, it is the same thing as art: anyone can buy a Mona Lisa replica (purely out of interest, this masterpiece was insured for $100 million in 1962 but once we take inflation into account it would be somewhere around $860 million) but only one lucky – and wealthy – person can own the original. In a similar way, NFTs are intended to give you that special something that cannot be replicated: ownership of the original item and status.
Everyone is familiar with names such as da Vinci, Cézanne, and Gauguin whose masterpieces are displayed in famous galleries. But artists are shifting from canvas to digital as NFT sales skyrocketed. Pak, Beeple, Tyler Hobbs, Dmitri Cherniak, Justin Blau, and XCopy are becoming authentic celebrities. For instance, digital creator Pak sold Merge for a record-breaking $91 million, being the most expensive NFT art piece ever sold. This digital file is followed by: #2 Beeple’s EVERYDAYS: The First 5000 Days, which was sold at Christie’s for $69.3 million, #3 Julian Assange x Pak Clock, which sold for $52.7 million, and #4 Human One by Beeple, traded for nearly $29 million.
Meta, the company that runs Facebook, Instagram, WhatsApp, and Oculus among other platforms, suggests that “Creators today are using non-fungible tokens (NFTs) to take more control over their work, their relationship with their communities, and how they can monetize.”
Marketplaces: where to buy your next NFTs?
Ethereum is the most widely used blockchain for the release of NFTs, though other blockchains support them as well. These days, there’s no shortage of NFT sites to shop. OpenSea became the de facto NFT market and aims to become an Amazon or eBay of non-fungible tokens. Rarible and Foundation are also two of the strongest NFT marketplaces.
Wait… there’s an NFT Vending Machine?
Neon, the NFT and digital collecting platform, announced the launch of the world’s first NFT vending machine located just off Wall Street. The company shares: “the machine accepts USD credit and debit cards, then dispenses a box with a unique code inside it for the chosen NFT, which is easily redeemable on the Neon platform. With no cryptocurrency, crypto wallet, or specialised knowledge required, Neon has built the simplest, most accessible way to buy, sell and trade NFTs in the real world. The vending machine is open 24 hours a day.” Customers will have no idea what piece of art they will purchase as the machine selects an NFT at random.
NFTs became a cultural phenomenon. And if you are wondering if you should invest in NFTs, we must tell you that their future is unclear. But between a candy bar and an NFT, at least NFTs are sugar-free.