Digital collectibles, also known as Non-Fungible Tokens (NFT), have remained in the spotlight throughout the year after Twitter founder Jack Dorsey’s autographed “first tweet”, following setting his Twitter account, was auctioned and sold at $2.9 million using Ether cryptocurrency. A series of blockchain news on the internet and the influx of interest on NFTs have made the tokenised digital art a significant form of asset and also secured its place among the most popular searches in 2021, according to Google. However, if NFTs are worth the hype or money is still a far question when many are struggling to wrap their heads around the concept. Here are some basics that might help to clear the cloud:
What is NFT? Why are they expensive?
NFT stands for Non-Fungible tokens, which at this point are among the internet classics. NFTs are tokens that one can use to represent ownership of unique items, beginning from tacos to toilet papers to just memes created on the internet. Although, one can even tokenise things like paintings or real estate under it. “They can only have one official owner at a time and they’re secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence,” explains Ethereum.org. In simpler words, NFT is an economic term that one can use to describe their belongings like furniture or files on the computer, and they are expensive because these things are not interchangeable due to their unique properties.
They can be differentiated from fungible items, on the other hand, as fungible items can be exchanged as their value defines them rather than any particular property. For instance: ETH (cryptocurrency) or dollars are fungible as 1ETH / $1 can be exchanged with things that are of the same value. It is similar to a trading card.
How does NFT work?
NFT can literally be anything like drawing, music, artificial intelligence, and so on so forth created digitally. As the Verge explains, most NFTs are part of the Ethereum blockchain, however, much different from bitcoin or dogecoins, which is a different story altogether. In short, NFT is supposed to be a collective item, only digital. When someone purchases an NFT, he/she owns exclusive ownership and only one owner can have the right at a time. The digital data makes it viable to determine who owns the original right, the rights can only be transferred through transfer tokens between buyers and sellers.
What were the popular NFTs in 2021?
As per Google, the most popular one remained Twitter founder’s “first tweet,” which was brought by a Malaysian buyer. The second most popular one was ‘Hasmarks’. It is a living art collectible put together by over 70 artists worldwide and made up of 16,384 unique digital portraits, TRG Data Centers reported. It was sold with 100,000% profit over a period of three days, Digit.fyi reported. The most expensive, however, was placed in the fifth position in the “most popular” list. The piece, called ‘Everydays: the first 5000 Days’, was created by Mike Winkelmann (Beeple). It was sold for $69 million in February. Here is the complete top 10 list:
1. The first tweet, sold for $2.9 million
2. Hashmasks, sold for $16 million
3. Doge NFT, sold for $4 million
4. Grimes NFT, sold for $6 million
5. Everydays: the First 5000 Days, sold for $69 million
6. Rick and Morty NFT, sold for $1.6 million
7. Crossroads NFT, sold for $6.6 million
8. CryptoPunks #7804, sold for $7.5 million
9. Genesis estate NFT, sold for $1.5 million
10. World Wide Web Source Code NFT, sold for $5.4 million
How to buy?
If one is keen to engage in NFT collection, then one needs to acquire some key items:
1. A digital wallet enable to store NFT and cryptocurrency.
2. One can buy NFT using crypto or credit on platforms like Coinbase, Kraken, eToro or PayPal.
3. Popular marketplace for NFT are OpenSea.io, Rarible, Foundation but must ensure to research carefully before buying.
(Image: Unsplash (representative)
Credit: Source link