Photo: Polunina Mariia (Shutterstock)
Non-fungible tokens or NFTs have become an overnight investing phenomenon $ 60 million in sales on TuesdayAn NFT is a type of cryptographic token that is used to make digital media unique and therefore collectable, regardless of whether it is a GIF or even a sporting highlight. If you’re wondering why everyone suddenly forgot how to take a simple screenshot, or are otherwise baffled, you are not alone.
What are NFTs?
Using blockchain technology, NFTs refer to an official copy of digital media that can then be sold by artists, musicians, or sports companies to make money on content that would otherwise be cheap or free. NFTs differ from cryptocurrencies because they are not interchangeable – each is unique.
When you buy an NFT through a crypto asset marketplace, you can keep it in your digital wallet or offer it for sale on the marketplace. When selling, all computers on a decentralized network record the transaction in a shared ledger. This is practically a certificate 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. According to Yahoo, brands like it Nike, Louis Vuittonand the NBA have already started generating NFT-based assets. The NBA has started a dedicated collection point called NBA top shot. Last week artist Chris Torres sold a one-of-a-kind version of Nyan Cat, a popular flying cat meme with a pop-tart body that leaves a rainbow trail, for the equivalent of around $ 580,000, according to the New York Times. Rick and Mortys Justin Roiland has too jumped in NFTs.
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Why should anyone spend money on it?
It may seem bizarre to buy the “authentic” version of something that you can easily screen from your desktop, but it’s easy to overlook the emotional value of collecting, especially when it comes to original art. Part of the appeal is to own an authentic object, created by an artist you like, and the boastful rights that come with it. In essence, this is not much different from owning an original Andy Warhol painting that can be viewed, sold, or shared – it’s just digital. Also, crypto art is finally solving the problem of artists getting paid, as the creators can program these assets to pay royalties every time the collectible is sold.
Additionally – and possibly more importantly (if we explain the renewed interest in NTFs that has existed for years) – people are increasingly viewing NFTs as speculative investments as they can be bought and sold on online marketplaces (an NBA digital top shot) trading card of basketball star LeBron James recently sold for $ 100,000, for example).
The increase in recreational investment during the pandemic is likely a factor too: most of these exchanges naturally accept cryptocurrencies, which meets the demand of individual investors who have cryptocurrency supplies and want to spend them on something that is both fun and potential, later to make more money. It remains to be seen whether that interest will sustain the valuation of a flying cat gif for half a million dollars.