A work called Nyan Cat by Chris Torres sold for $590,000 recently. It's part of growing interest in digital assets, known as nonfungible tokens, or NFTs, that are generating millions of dollars in sales every day. Chris Torres hide caption
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Chris Torres
A work called Nyan Cat by Chris Torres sold for $590,000 recently. It's part of growing interest in digital assets, known as nonfungible tokens, or NFTs, that are generating millions of dollars in sales every day.
Chris Torres
The artist Grimes recently sold a bunch of NFTs for nearly $6 million. An NFT of LeBron James making a historic dunk for the Lakers garnered more than $200,000. The band Kings of Leon is releasing its new album in the form of an NFT.
At the auction house Christie's, bids on an NFT by the artist Beeple are already reaching into the millions.
And on Friday, Twitter CEO Jack Dorsey listed his first-ever tweet as an NFT.
— Tanay Jaipuria (@tanayj) March 1, 2021Digital artist Beeple posted a new work of art online every single day for 5000 days.
Those pieces have been brought together in one digital collage EVERYDAYS: THE FIRST 5000 DAYS, minted as an NFT and is being auctioned off by Christie's.
The current bid is $3M pic.twitter.com/rwwa64YXNV
Safe to say, what started as an Internet hobby among a certain subset of tech and finance nerds has catapulted to the mainstream.
Which leads to some obvious questions. Chief among them: What on earth is an NFT?
NFT stands for what now?
It stands for "nonfungible token."
Nonfungible, meaning you can't exchange it for another thing of equal value. A $10 bill can be exchanged for two $5 bills. One bar of gold can be swapped for another bar of gold of the same size. Those things are fungible. An NFT, though, is one of a kind.
The token refers to a unit of currency on the blockchain. It's how cryptocurrency like Bitcoin is bought and sold.
"Remember those days where people would line up for the newest Nike Air Jordan sneakers at the physical store? This is the new digital equivalent," said Katie Haun, a general partner at the venture capital firm Andreessen Horowitz.
"It's everything that brings together culture, and it's also a bet on the future of e-commerce," Haun said.
Still. What exactly do you get when you buy an NFT?
This question unleashes a fury of debate among NFT enthusiasts. The answer is not simple.
Are you buying what amounts to an Internet trophy? Clout? A feeling? A digital collector's item?
Perhaps, but you are also purchasing a kind of bar code, almost a certificate of authenticity that serves as proof that a certain version of something is uniquely yours.
"The underlying thing that you're buying is code that manifests as images," said Donna Redel, who teaches courses on crypto-digital assets at Fordham Law School. "You're buying a different format of art."
— NBA Top Shot (@NBATopShot) January 22, 2021👑HAIL TO THE KING👑@andy8052 acquired this Serial No. 1 Legendary LeBron James Moment from our From The Top Series 1 set for $71,455 🚀 An iconic tribute dunk, indeed 💯
The TOP acquisition for any NBA Top Shot Moment ... so far 📈
Very nice pickup for the collection! 🎉 pic.twitter.com/LQuhgeYr45
But note that when you buy an NFT, you're usually not getting the copyright or trademark to the item. And just because you own an NFT doesn't mean there aren't endless other versions of that thing on the Internet. There will be. It's the Internet.
Still, NFT enthusiasts say owning a piece of code in a blockchain has shown itself to be an incredibly valuable thing.
"You're not buying the picture," said Jake Brukhman, founder of cryptocurrency investment company CoinFund. "You're buying the property rights to the picture."
She explained it better in 1m than I could in 2K words 😅 pic.twitter.com/sJ7Z7NjWH0
— robert (sped up) (@Brotractor) March 4, 2021
Why don't people just right-click on an image instead and save it to their desktop? That's free.
True.
But like with other collectables, whether it's baseball cards, rare books or fine art, having an original is special.
Take CryptoPunks, pixelated avatars that have fetched millions of dollars. Sure, you could download one of the alien avatars, but collectors would not consider it authentic. A real alien CryptoPunk costs, on average, $900,000.
Someone just placed a 1,390 ETH ($2 million) bid on CryptoPunk #3100 👀 pic.twitter.com/cKwPoeFMGz
— nft now (@nftnow) March 1, 2021
To be clear, there's no visual difference between an original and a copied version.
And to make it even more confusing, not all NFTs are originals. Many are the digital equivalent of a reprint. But in this case, the reprint has what is essentially a unique bar code, or "token," on the blockchain, which is a type of decentralized record-keeping system. In other words, instead of one institution, like a bank, having a ledger of transactions, a blockchain uses a vast network of computers that all hold each other accountable on a shared public record.
That makes it hard to remove an NFT from the Web entirely. It also means there's a way to trace an NFT's origin and transaction history.
How do you buy or sell an NFT?
It takes some steps.
First, you usually have to buy a cryptocurrency, like Ethereum. That's a process in and of itself. But once you do, you can go to an NFT marketplace. Some of the popular ones include KnownOrigin, Rarible and OpenSea.
There, you can bid on an NFT and wait for the auction to end. If no one outbids you, you get the bragging rights.
— Dune (@DuneAnalytics) February 26, 2021@OpenSea is undoubtedly where all the NFT hype go through though, it does not get more hockey stick than this! 🏒⛵️
Dashboard by the Dune wizard @richardchen39 🧙♂️https://t.co/mpKOaBoPhh pic.twitter.com/TEMYbzjflW
How do you make an NFT?
Log on to one of the NFT marketplaces and upload a file. This process is called "minting" an NFT.
You'll usually be asked if it's a one of a kind, if there are multiple copies or if it's part of a collection. (A quick glance at an NFT marketplace shows just how easy the process is — maybe too easy. Some people are trying to sell tweets and even colors as NFTs.)
Once you're done, collectors can start bidding.
Digital artists can build a royalty into their NFTs, even for future sales, which is why many artists see promise in NFTs: It can cut out the middleman and open up a new way to make money.
If you're not interested in buying or selling them, why should you care?
As tens of millions of dollars in transactions pour in for NFTs, enthusiasts say, NFTs will soon expand beyond trading art, music, video clips and memes. One startup lets people use their NFTs as collateral for loans.
Silicon Valley investors say the moneymaking possibilities in the NFT world are limitless.
"At the time the iPhone was created, nobody would've thought that one of the killer apps was going to be hailing a ride," said Haun of Andreessen Horowitz.
What are the risks?
There's always a chance that a tech frenzy is a passing fad or is stoking a speculative bubble. If you spend a pretty penny on an NFT and then enthusiasm and values suddenly plummet, you could be in for a big loss. But NFT backers say the system's built-in scarcity should keep values up, as long as the surge of interest persists.
Be cautious about works that appear to be created by famous artists. NFTs resembling pieces by the artist Banksy have netted $900,000, but they have turned out to be fakes.
Then there is the environmental impact of NFTs, which has attracted real scrutiny. The computing power required to operate the underlying blockchain system of NFTs is immense. By some estimates, one crypto transaction could gobble up more power than the average U.S. household uses in a single day. One artist estimated that generating six NFT pieces consumed more electricity than his entire physical studio did in two years.
"The energy production infrastructure is out of our sight," wrote Brussels-based artist Joanie Lemercier.
"And we often have the feeling that electricity is abundant, limitless and we disregard its impact."
FAQs
What is an NFT and why are people paying so much for them? ›
NFTs are "one-of-a-kind" assets in the digital world that can be bought and sold like any other piece of property, but which have no tangible form of their own. The digital tokens can be thought of as certificates of ownership for virtual or physical assets.
Why would anyone buy an NFT? ›Ownership and Originality
One of the most significant advantages regarding “Why do people buy NFTs?” is that NFTs are held on the blockchain, which enables the digital assets to authenticate publicly without a third party. Thus, the tokens are unique and serve as a digital signature for certifying ownership.
Each NFT is unique, and there's only one of each available. This makes them scarce, thereby increasing their value per unit of demand. In fact, specific collections of NFTs launch in limited quantities, which means their value will rise once they're all sold as there won't be any more NFTs left to purchase.
What does NFT mean? ›NFT means non-fungible tokens (NFTs), which are generally created using the same type of programming used for cryptocurrencies. In simple terms these cryptographic assets are based on blockchain technology. They cannot be exchanged or traded equivalently like other cryptographic assets.
Why do people spend millions on NFT? ›That's because NFTs aren't replicable: Their ownership and validity can be tracked and verified from the moment their data gets uploaded to a blockchain ledger. Rarity is a valuable trait in any collector's world, and each NFT is guaranteed to be unique.
Do people actually make money off of NFT? ›The direct and effective method of making money with NFTs is to create and sell them. Yes, you can create and sell anything digital such as arts, images, videos, memes, properties, etc., as NFTs. If you have a notch to creativity, you can monetize all your creations by selling them as NFT.
What do people do with the NFT they bought? ›The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded.
Is buying an NFT worth it? ›NFTs have become an investment opportunity. Like the physical arts, it's not the ownership that matters, instead, it's the ability to attract the highest bids during sale. When you sell an NFT at a higher price than you bought it, then it's worth the investment.
What is the biggest advantage of NFT? ›One of the advantages of NFTs is that it allows users to customize both current and new assets. Everything depends on the smart contracts that are used to construct NFTs. This feature of the technology enables total control over each token, allowing users to modify everything from the color scheme to the logo.
What is an example of an NFT? ›Here are some examples of NFTs that exist today, to help you get the idea: A unique digital artwork. A unique sneaker in a limited-run fashion line. An in-game item.
What is the price of NFT? ›
Live NFT Price Summary
NFT's current price is $0.00000043498, with a 24-hour trading volume of $6.87M. NFT is -2.03% in the last 24 hours, with a circulating supply of 277.08T NFT coins and a maximum supply of 999.99T NFT coins. NFT ranks 248 by market cap.
How Can NFT Artists Earn Royalties? The content creator, or original artist of the NFT, earns royalties through subsequent sales in the secondary market. For example, after the original artist/owner first sells the NFT, the buyer/investor may then sell the NFT to another buyer/investor in the secondary market.
What is the average income from NFT? ›The average Nft salary (globally) is $86,514 per year. Salary estimates are based on anonymous submissions by Nfts, website users just like you and collected from past and present job posts. Once your submission is reviewed by the community, you'll get access to all salary reports.
How is NFT used in real life? ›Thus, NFTs can be used to prove the individuality or uniqueness of something—and typically have associated metadata tied to it, such as an image, video file, or document. NFTs can prove ownership over a digital or physical asset depending on the issuer and the associated metadata.
What are the pros and cons of owning an NFT? ›Advantages of NFTs include fractional ownership of assets, royalty payments to the NFT creator, safe technology, and efficient sales. Disadvantages of NFTs include high minting costs, volatile pricing, and a high prevalence of imitation projects and fraud.
What is the most successful type of NFT? ›Digital collectibles: Probably the most famous type of NFTs, thanks to collections such as Bored Ape Yacht Club and CryptoPunks. Cryptopunk#5822 sold for over $23 million, making it the highest collectible sold.
What is the key to successful NFT? ›The best NFT projects have a few things in common, like creativity, appeal to a clear audience and value beyond the price, experts say. To be successful, brands need to attract the web3 community to their NFTs, but they shouldn't forget their existing core customers either.
What sells as an NFT? ›Binance's NFT platform lets you sell non-fungible tokens from various different categories, including art, sports, collectibles, entertainment, and gaming. Two blockchains are supported: Ethereum and Binance Smart Chain (BSC).
What is the most common type of NFT? ›Collectible NFTs
After digital artwork, one of the most popular types of NFT is undoubtedly collectibles. Given the digital scarcity and rarity enabled by blockchain technology, collectible NTFs have naturally become some of the most sought-after.
The conversion value for 500 USD to 29951.276 NFT. BeInCrypto is currently using the following exchange rate 59.903. You can convert USD to other currencies like XRP, BUSD or ETH. We updated our exchange rates on 2023/02/19 20:09.
How much is $500 NFT? ›
The conversion value for 500 NFT to 7.182 USD. BeInCrypto is currently using the following exchange rate 0.015. You can convert NFT to other currencies like BUSD, USDC or ETH. We updated our exchange rates on 2023/02/07 00:37.
How much is 1 NFT in dollar? ›1 NFT = 0.01641 USD.
How much is 1 NFT coin in dollars? ›The conversion value for 1 NFT to 0.017 USD.
How much is $100 to NFT? ›The conversion value for 100 USD to 5990.256 NFT. BeInCrypto is currently using the following exchange rate 59.903. You can convert USD to other currencies like MATIC, USDC or BTC. We updated our exchange rates on 2023/02/18 08:27.
What is a NFT in social media? ›NFTs (non-fungible tokens) are unique tokens that store valuable information. They are digital assets representing Internet collectibles. Many believe that NFTs are the digital answer to collectibles since they can prove a person's ownership of a digital file.
What is the meaning of NFT in Instagram? ›What are NFTs? NFTs stand for non-fungible tokens. Each NFT is stored on a blockchain with smart contracts, meaning their uniqueness is guaranteed. NFTs are one-of-a-kind digital assets that can't be replaced.
What does NFT mean image? ›According to Wikipedia, a non-fungible token (NFT) is data (images, videos, GIFs, and more) kept on a blockchain that guarantees an item to be 100% unique and unchangeable. Non-fungible tokens can be represented by media files such as videos and images in different formats.
What does NFT mean in Facebook? ›NFT stands for non-fungible token. “Non-fungible” means something is one-of-a-kind and can't be replaced. Think of the Mona Lisa painting — there's only one in the world. NFTs are digital assets that represent things like art, virtual avatars, GIFs, videos, trading cards and even memes.
What is an NFT and how does it work? ›An NFT is a digital asset that can come in the form of art, music, in-game items, videos, and more. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
What is the most popular social media for NFT? ›Discord servers
Yet another extremely popular advertising platform for NFT projects is Discord. In fact, almost all widely popular NFT projects have their own Discord community. However, since creating your own community can take a lot of time on Discord, you can join different groups and use them to promote your NFT.
What does NFT stand for in selfies? ›
NFT images are an image in the form of a digital token. These tokens are then sold online. An NFT can be anything in digital form. For example, artwork, photographs, and animations can be converted into an NFT and sold online. The NFT is shaking up the art world.
How do you create an NFT? ›- Step 1: Figure Out What You Want to Create. NFTs are typically tied to a piece of digital art. ...
- Step 2: Choose a Blockchain. ...
- Step 3: Set Up an NFT Wallet. ...
- Step 4: Choose an NFT Platform. ...
- Step 5: Create the NFT. ...
- Step 6: List the NFT for Sale.
The term NFT means "non-fungible token." NFTs are one-of-a-kind digital assets number that can convey ownership of digital content such as images, videos and music. In some cases, NFTs have fetched staggering sums, like the collage created by artist Beeple that sold for $69 million in 2021.
What does NFT stand for in Tiktok? ›Non-fungible tokens (NFTs) and social media go hand in hand. NFT creators utilize social media to promote their work.
Can you turn a photo into an NFT? ›How to Create NFT Art Work？ Click the button "Create NFT Now". Upload your image, choose the art effect you prefer. Apply the style to your image and then automatically make your image into an NFT.
What happens when you take a picture of an NFT? ›It is illegal to screenshot an NFT and pass it off as your own. It is also illegal to post it online or make a physical copy. An individual could be sued for copyright infringement or other criminal charges if they did this.
Does owning an NFT mean you own the image? ›But NFTs are designed to give you something that can't be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original.
What is the full word of NFT? ›/ˌen.efˈtiː/ us. /ˌen.efˈtiː/ abbreviation for non-fungible token: a unique unit of data (= the only one existing of its type) that links to a particular piece of digital art, music, video, etc. and that can be bought and sold : Dorsey auctioned his first tweet as an NFT.