NFT Madness: Why are non-fungible tokens all the rage? | Arts and Culture News
Explain the popularity of digital art with property registered on the blockchain and purchased in cryptocurrency.
Some of the foam may have come off this year’s cryptocurrency rally, but crypto FOMO is finding new foothold in a phenomenon that has left many people scratching their heads in disbelief.
Crypto investors spend tens of millions of dollars on digital art that only exists in the ether.
From humble beginnings as a fringe hobby, the use of non-fungible tokens (NFTs) has become mainstream – as evidenced by the acquisition of a collage of images by digital artist Beeple for $ 69.3 million.
What exactly is an NFT?
NFTs are digital files backed by blockchain technology – the same technology that popular cryptocurrencies like Bitcoin and Ethereum are based on. But unlike cryptocurrencies, an NFT is totally unique, and the blockchain ledger it sits on verifies who the rightful owner of that one-of-a-kind item is.
So what’s the connection with art?
Digital artwork is marketable as unique collectibles when made into NFT. Cryptocurrencies like Ethereum are typically required to enter an NFT transaction, and its public ledger shows a record of both ownership and authenticity.
Artists, influencers, and musicians started making their fortunes selling NFT versions of digital art, with investors lining up to get their piece of the pie.
Are NFTs only for works of art?
No. Almost any digital collectible can be turned into NFT – from online collectible cards, GIFs and sports memorabilia to portable video game devices and virtual earth in fantastic worlds. Twitter co-founder and CEO Jack Dorsey’s first tweet was turned into NFT and auctioned this week for $ 2.9 million.
Why do the rich spend millions on NFTs?
Many of those who buy NFTs are crypto millionaires who hope to diversify their holdings.
Where are NFTs sold?
You can find your choice of litter in digital markets like OpenSea, Rarible, and Mintable. NBA Top Shot sells pro basketball “moments” and Valuables offers tweets for sale.
How to buy an NFT?
First, you will need to determine which cryptocurrency is required, obtain said crypto, and then set up a digital wallet for the transaction. Beware of pesky fees along the way for converting currency and paying for “gaseous” energy on the Ethereum network.
Can anyone do an NFT?
Well there are a lot of steps involved. But if you are motivated and want to try your crypto skills, as long as you are connected to the internet and understand the basics of moving from a cryptocurrency exchange to the digital wallet and online marketplace, you should be fine. happen. CoinDesk released this practical guide if you want more details.
Is it just a fad?
If you are asking why someone would pay over $ 1000 for a virtual Christmas sweater with the Bitcoin logo all over the place, maybe you are not in the right place. But it’s entirely possible that the whole NFT obsession will turn out to be a fad – or not. Many of the early NFTs were in the style of CryptoPunks, pipe-smoking digital beings that date back to 2017, and CryptoKitties, cute virtual felines that started in the same year.
Will the value of NFTs continue to increase?
NFT’s total sales in 2020 were worth around $ 250 million, while last month alone sales topped $ 220 million, according to NonFungible.com. All-time sales are around $ 534 million, with the average price of an NFT at $ 97. But the market is volatile and only suitable for those who are willing to lose their capital.
What about companies in the NFT space?
Venture capitalists and tech titans also continue to pump money into NFT startups, with $ 90 million spent on these companies so far in 2021. Last year, $ 35 million have been invested in these companies. The biggest payout so far this year is $ 48 million in venture capital pooled by Sorare, a blockchain-based fantasy football game. Blockchain company Dapper Labs, which is the NBA’s Top Shot partner, is said to be looking for a $ 250 million cash injection.