WHAT IS ALL THIS NFT STUFF AND WHAT’S THE BIG FUSS ABOUT?
In today’s newsletter we go back to technical issues and take on NFT. I will tell you what is NFT, why it can cost millions and show some interesting examples. Feel free to read!
The new era in the crypto world has introduced something more than cryptocurrencies. NFT is one of the most popular ways to collect and earn.
So let’s start with a dry definition that discusses what NFT is in theory.
NFT is a type of cryptocurrency token in the blockchain ecosystem. Unlike ERC-20 tokens or cryptocurrencies, all NFT tokens are characterised by indivisibility and non-exchangeability. No two NFT tokens represent the same string of data, nor can they be represented as a fraction of a whole number. NFT tokens typically conform or follow the ERC-271 standard, which defines their basic data transfer and storage functions. The ERC-271 standard has its roots in the Ethereum ecosystem, where NFT tokens first appeared.
Owning a given token does not entitle us to copyright the object it represents. For that, a proper legal contract is needed. An artist can sell an NFT token representing their work, but not transfer the rights associated with the change of ownership to the buyer. In this sense, NFT tokens are separate from copyright.
So in short, NFTs are non-exchangeable tokens, a kind of certificate of authenticity, representing the digital value of the holder, unique and total/indivisible. It is an asset representing tangible and intangible things. An NFT can be a piece of art, a piece of music, virtual real estate, collector’s cards or a club membership, and the technology behind NFTs has been constantly evolving since 2017.
It is important to note that NFT is a digital creation and owning it does not mean that you become the owner of the asset.
HOW IT WORKS?
NFT tokens are sold and purchased on special online sites. Interested parties can browse the tokens available for purchase and buy them with the cryptocurrencies they hold, e.g. Ethereum, Polygon, Polkadot, Solana. It is not possible to buy NFTs without connecting an existing account with cryptocurrencies.
All NFTs have what is known as a release date, and it is worth keeping an eye on the projects you are interested in so that you have time to buy your NFT in the early stages. Just a few days after the release the value of a given NFT can increase several times. With time, when a given collection becomes more popular, the value can surprise us very, very, very positively.
WHO GIVES NFT VALUE AND HOW?
The value of NFT lies in its uniqueness. Due to the fact that there is no other piece of NFT that is the same, they are like works of art. The older and more interesting the piece, the more expensive it is. Interestingly, it is the market, i.e. we decide how much we are willing to pay for a given NFT. Some prices are really crazy. The most popular tokens are those with a collector’s value. Their value is defined and constantly growing. The most willingly bought NFTs are collectors’ pieces and sports pieces.
In 2021 alone, the value of NFT sales amounted to USD 17.7 billion!
EXAMPLES OF THE MOST EXPENSIVE NFTS
1. Digital artwork, created by an anonymous artist “The Merge”. Sold for $91.8 million. It is interesting to note that this graphic was divided into 312,686 pieces and sold for 28,983 buyers.
2. Mike “Beeple” Winkelmann’s painting “The First 5000 Days.” Sold for $69 million.
3. “Covid Alien” from the CryptoPunk collection. Sold for $11.75 million.
4. Another Beeple work “The Human One.” Sold for $29,985,000.
5. Ringers #109 from the Art Blocks collection, sold for $6.93 million.
NFT has as many supporters as opponents. Some say it’s one of the best ways to grow wealth, while others say it’s a stupid fad that no one needs. However, it is undoubtedly a revolution in the crypto markets that has been surprising us since 2017, and something feels like this is just the beginning.
If you want to learn more about NFT then our proprietary course will explain it to you in detail. Buy the Golden Course HERE.
Our community gets information about the release dates of interesting NFT and other interesting projects and cryptocurrencies every day. Buy access to the Golden Keys group with this information HERE.
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