The latest buzz in the art world isn’t even a Monet or what Banksy’s been up to.
You know times are changing when Nyan Cat was sold for 300 ETH (approximately US$534,960) and Grimes, the one and only girlfriend and baby mummy of Elon Musk, sold US$6 million worth of digital art. Before we could even catch up with Twitter CEO Jack Dorsey’s sale of his first tweet, Elon Musk himself has put up a tweet of his own for sale, the highest bid for which currently stands at over US$1.1 million.
It’s how these assets were sold/are being sold that got tongues really wagging – in the form of Non-Fungible Tokens, aka NFTs.
If you’re totally perplexed by the acronym and even more so by how it works, welcome to the party.
What are NFTs
NFTs exploded the past month as the latest hot new tech thing turning the art, music and finance worlds on their heads. It is essentially a digital certificate that allows buyers to purchase ownership of a digital asset, whether as an image, animation or video, in the form of a unique digital token on a blockchain.
Non-fungible means it is unique and irreplaceable with something else. For comparison, Bitcoin is fungible – it can be traded for another Bitcoin and its value and what it is remains the exact same thing. In the instance of a one-of-kind meme for example, if you trade your NFT for it away, you’ll get in return something else completely (perhaps a song, depending on the NFT).
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How does it work
At its most sophisticated level, NFTs are part of the Ethereum blockchain, which is a cryptocurrency that also supports NFTs. It can store extra information that differentiates them from a typical ETH coin. Other blockchains can implement their own versions of NFTs at any time, like Tron that released its own its own TRC-721 NFT in December 2020.
Essentially, NFTs can be anything digital from drawings, music, renderings of tattoo, even games highlights. Kings of Leon is the first band to put forth an album as both a streamable collection of songs and an NFT. Deadmau5 has sold digital animated stickers. There’s also a clip of a Lebron James two-handed reverse windmill slam dunk.
When you buy an NFT, you buy ownership of the unique bit of information about it, including its smart contract, stored on the blockchain. It proves that you own it, even if other people can still access, see and screenshot it online. Your ownership is recorded on said blockchain. Think of it as there being multiple copies of the Monalisa, but there is only one original hanging in the Louvre.
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Where can you buy NFTs?
There are plenty of marketplaces available now to buy and sell NFTs. Some of the more popular ones include Nifty Gateway, MakersPlace, SuperRare, OpenSea, Decentraland and Rarible. Some are more genre-specific than others, like YellowHeart for music and concert related NFTs and NBA Top Shot for all things NBA.
How can you make and sell NFTs?
Almost anything digital can be made into an NFT. All you need to do is to log on to the different websites, apply to create a project to be sold as an NFT on their marketplace and they will walk you through the process.. The thing to note is that the process differs from site to site.
Can NFTs be stolen from me?
Storage of information on blockchain means it records each transaction that takes place, making it harder to steal and flip than a tangible item. Having said that, cryptocurrencies have been stolen before so it really depends on how the NFT is stored.
