Non-fungible tokens, or NFTs, have become a nighttime investment phenomenon, with $ 60 million in sales on Tuesday– exceeding total sales for the fully 2020. An NFT is a type of cryptographic token used to make digital media unique and therefore collectable, whether it be a GIF or even a sports highlight. If you are wondering why everyone suddenly forgot how to take a simple screenshot or is baffled by it – you are not alone.
What are NFTs?
Using blockchain technology, NFTs designate an official copy of digital media, which can then be sold by artists, musicians or sports organizations to earn money from content that would otherwise be cheap or free. NFTs are different from cryptocurrencies because they are not interchangeable – each one is unique.
If you buy an NFT through a crypto asset market, it will be yours to keep in your digital wallet or put on the market for sale. When sold, all computers on a decentralized network record the transaction in a shared ledger, which, in fact, is a certification of authenticity that cannot be changed or deleted.
NFTs have a wide range of uses, including collectibles sports cards, digital art and virtual real estate. By Yahoo, brands like Nike, Louis Vuitton, and the NBA has already started generating NFT-based assets, with the NBA launching a dedicated collectible website called NBA main shot. Last week, artist Chris Torres sold a unique version of Nyan cat, a popular flying cat meme with a Pop-Tart body leaving a rainbow trail, for the equivalent of about $ 580,000, according to the New York Times. Rick and MortyJustin Roiland too jumped to NFTs.
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Why would anyone spend money on it?
It may seem bizarre to buy the “authentic” version of something that you can easily capture on your desktop screen, but it’s easy to ignore the emotional value of collecting, especially when it comes to original art. Part of the appeal is having an authentic item created by an artist you care about and the bragging rights that come with it. Essentially, this is not much different from having an original Andy Warhol painting that can be displayed, sold or shared – it is simply digital. In addition, CryptoArt finally unravels the problem of artists being paid, since creators can program these assets to pay royalties each time the collectible is sold.
In addition – and possibly more importantly (if we are explaining the renewed interest in NFTs, which have been around for years) – people increasingly see these digital assets as speculative investments, since they can be bought and sold in online markets (a collectible NBA Top Shot digital card from basketball star LeBron James recently sold for $ 100,000, for example).
The increase in recreational investments during the pandemic is also a likely factor: most of these exchanges accept cryptocurrencies, of course, which meets the demand of individual investors who have stocks of cryptocurrencies and want to spend them on something that is fun and has potential to make more money later. Whether that interest will continue to support half a million dollars worth of flying cat GIFs remains to be seen.