WTF is an NFT?
- NFTs have taken the world by storm, with memes and art pieces selling for millions of dollars.
- The digital assets have been lauded for letting artists reclaim power and mocked for their seemingly ridiculous nature. Here’s an inside look into the world of NFTs.
NFTs have been splashed across headlines and social media of late. This week Elon Musk turned down $1 million after initially offering to sell his tweet as an NFT. Last week Christie’s sold an NFT art piece by digital artist Beeple for $69 million. Earlier another piece by the artist sold for $6.6 million. Kings of Leon released their latest album as an NFT. The internet meme of the animated Nyan Cat which was uploaded on YouTube in 2011 recently sold as an NFT for nearly $600,000.
So what are NFTs exactly?
NFTs or “non fungible tokens” are unique digital assets that are distinguishable from other digital collectibles. They allow for the tokenization of collectibles like art and even real estate. Ownership of NFTs is supported on a blockchain such as Ethereum, meaning that its record of ownership is publicly accessible. They differ from other cryptocurrencies in that they cannot be duplicated or traded at equivalency as they function in the same category as rare collectors items like mint-condition baseball cards.
So why are NFTs so popular?
NFTs have actually been around for a while. In 2017, the “digital beanie babies” CryptoKitties were so in demand that the game clogged up Ethereum’s digital currency network. According to Non Fungible, CryptoKitties have racked up sales of $40 million to date. The resurgence of NFTs can be traced back to the start of the pandemic which provided ample opportunity for the virtual assets to climb into mainstream recognition in tandem with other cryptocurrencies like bitcoin. In 2020, the total number of NFT transactions grew to $250 million.
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