The NFT Craze

Have you heard about this new NFT thing? How people are selling NFT for quite many dollars? Let's take a deep dive into the NFTs and talk about them.

· 5 min read
The NFT Craze
Do you have questions about this emerging... um... art form? Platform?

It seems any news or trending thing on blockchain technology gets people thinking, um ...... WTH is going on! Since I have been getting news on people making millions on NFTs, It go me thinking 🤔🤯 What is an NFT? Well, let me give an explainer.

NFT - its stands for Non-fungible token. A non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a digital ledger (blockchain). NFTs can be associated with reproducible digital files such as photos, videos, and audio.

Non-fungible token - Wikipedia

Oh! Sorry are you getting confused, well “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.

Example NF artworks

So we can simply say that an NFT is a unique identifier that can prove ownership of digital goods. They make digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin.

A record of who owns what in the NFTs is stored on the Etherium Blockchain. NFTs can also contain smart contracts that may give the artist, for example, a cut of any future sale of the token. Traditional works of art such as paintings are valuable precisely because they are one of a kind. But digital files can be easily and endlessly duplicated. With NFTs, artwork can be "tokenized" to create a digital certificate of ownership that can be bought and sold.

How Blockchain Works

The most expensive NFT

So what got me into researching NFTs is the crazy figures some of these NFTs are being sold in the NFT supermarket and actions.

In theory, anybody can tokenize their work to sell as an NFT but interest has been fuelled by recent headlines of multi-million-dollar sales. A phenomenon in the NFT marketplace is limited art collections such as Cryptopunks, Bored Ape Yacht Club, and Cool Cats.

Each of these collections is limited to 10,000 pieces of digital art. Each day 1000s of NFT artworks are sold. Like traditional art pieces found in an auction by Christie's or Sotheby's, the rarer the artwork, the higher the price it can fetch.

The remaining third of a 10,000 Cryptopunks collection was recently sold for over €472 million. This pixelated art piece shows the potential of NFT sales in the future.

Why should I invest in NFTs?

You may wonder why someone would invest in something that you can easily duplicate on a mobile or laptop. Expensive NFTs are being used as profile pictures on social media accounts to show wealth, much like business people wear expensive watches.

Many people are buying into the world of NFTs to be part of an online community. Owning certain NFTs can give you access to exclusive content and live events.

Digital investors are utilizing NFT marketplaces to make large amounts of money in what they hope will be a short amount of time. Also, business models from many industries are getting reshaped to incorporate NFT trading. A single NFT can be bought and sold multiple times, but the buyer must pay a royalties fee to the original owner or creator with each sale. The royalties fee is typically around 10 percent.

Charles Morin, Co-founder of Jumy, told Euronews: "Since we can trace the full story of the token at every single ownership transfer, the artists get some money out of the royalties."

Whether involvement in NFTs comes from financial interest, joining a community, or simply for the love of an art piece, the future of NFTs looks prosperous.

What's stopping people from copying the digital art?

Nothing. Millions of people have seen Beeple's art that sold for $69m and the image has been copied and shared countless times.

In many cases, the artist even retains the copyright ownership of their work, so they can continue to produce and sell copies.

But the buyer of the NFT owns a "token" that proves they own the "original" work.

Some people compare it to buying an autographed print.

So, What’s the point of NFTs?

That really depends on whether you’re an artist or a buyer.

I’m an artist.

First of all, 👏 . You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the iMessage App Store? No way.

Also, NFTs have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets super popular and balloons in value, you’ll see some of that benefit.

I’m a buyer.

One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs. Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.

No, I meant I’m a collector.

Ah, okay, yes. NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit. I feel kind of dirty for talking about that, though.

I think I have done enough talking on these NFTs. I hope this article helps you understand everything. And NO this article cannot be sold as an NFT or can it? Now Let me go get my art on and try my luck. 🎨