A Brief Guide on Non-Fungible Tokens (NFTs) for Beginners
NFTs might be something you've heard a lot of commotion on, whether a co-worker exclaiming how much some have sold for or the news discussing some artist releasing their line.
But what is NFTS? What are they, and why are people losing their heads about NFTs? In this blog, I go over NFTs, what non-fungible means, and what has been happening lately in non-fungible art.
What are NFTs?
The NFT is the digital record on the blockchain, which can't be tampered with or copied, and is attached to the music recording or artwork. NFTs, also known as "non-fungible tokens, " is described as a particular kind of crypto asset in which each item is unique. You can think of NFTs as certificates of authenticity for digital artifacts.
What Does "Non-Fungible" Mean?
While "non-fungible" is one of many, think of dollar bills, all valued equally and interchangeably. If you buy your lunch, the change you get back might be different coins than those in your pocket, but all are valued equally. Every dollar is worth just as much as any other dollar. Non-fungible is one of a kind and unique; there isn't another like it in the world.
NFTs in the News
NFTs have been all over the news, with some going for insane prices. Here are a few different snapshots of what has been happening in the world of non-fungible tokens.
A 10-second video made by an artist, Beeple, sold for a whopping $6.6 million in February 2021
Christie's Auction House sold a collage of 5,000 digital artworks by Mike Winkelman in early 2021 for an incredible $69 million.
A meme of the flying pop tart cat from 2011 sold for $500,000 on February 19, 2021, known as an animated Gif of Nyan Cat.
Musician Grimes sold her digital art for $6 million in early 2021
Twitter's founder Jack Dorsey sold his first-ever tweet with bids reaching $2.5m
A contemporary art specialist for Christie's Auction House states that the art world is entering unknown territory. Seeking bids in the first 10 minutes, already reaching millions of dollars, is entirely out of the norm.
Why are NFTs important?
In 2020 alone, NFT sales have soared, reaching $338 million, and it looks like this is only the beginning. The beauty is that NFTs use smart contract tech, so creators can get a slice of sales if their work is bought repeatedly. Typically, each NFT sold is on the blockchain, using Ethereum, where anyone interested can track who created the piece, who bought it, and how much money it brought.
NFTs have raised questions about what ownership means and how digital artifacts can change what it means to create value. Many people feel NFTs are speculative without any inherent value to their art. How we define value and its exchanges are changing, and it should be interesting to see what that will look like.