Bitcoin, Dogecoin and now NFTs. Blockchain has left all of us wondering what new form of cryptocurrency Musk ( the “Technoking” of Tesla) is going to tweet about tomorrow. What if I said an animated flying cat with a pop tart body (called “Nyan Cat”) was sold for $600,000, yes these are NFTs and the craze is only going up each day. So what are NFTs? Can you own NFTs? How do they work? Let’s explore a few of these questions. I’ll explain what I understood based on reading various articles.
Nyan Cat, Image: Youtube
NFTs - Non-fungible tokens
That only confused you more, didn’t it?
Fungible means something that can be exchanged for the same value. For example, one 100Rs note can be exchanged with two 50Rs notes or ten 10Rs notes. Non-fungible means something that is unique and cannot be exchanged for something of the same value. You cannot exchange NFTs for a like value because no two NFTs are ever the same, even the ones on the same platform are unique.
NFTs are digital assets like music, digital art, a GIF, cryptokitties, Sportscards, etc. By now it should make sense to you that NFTs are not divisible like normal currency, they come as a whole item and they are indestructible. Ex: This cryptokitty down here, no NFTs are not all about cats.
Muca Grimskicakes,Image:Cryptokitties
Why not just download the digital file, right?
If only making money was that simple, huh! Yes, you can make a copy of the digital file or screenshot it or make a replica, but the artwork is tokenized which enables the artist to create a digital certificate of ownership that can be bought or sold. Let me explain this with a simple example, consider the Mona Lisa painting, people can replicate it endlessly but there is only one original.
How do NFTs work?
Most of the NFTs are bought and sold on Ethereum- based NFT market. Ethereum is a cryptocurrency just like bitcoin, but this blockchain also allows NFTs. The artist who created the NFTs decides the availability of them, there can be only one of its kind, like a super rare pokemon card or there can be over 50/100/1000s of them, it is ultimately up to the artist.
Why are people paying millions?
Like any other piece of art, NFTs are mostly bought by people who want to collect. They are few people with good intentions too; they support artists by buying NFTs. It is usually those rich people with extra cash (here extra ethereum I suppose) lying around in my opinion. Few people also see potential in digital art and hope that the price of the asset goes up one day.
Few NFTs that made it big:
1) Everydays: The First 5000 Days
This was sold for USD 69,346,250, yes 69 million dollars. This was created by a digital artist Mike Winkelmann, professionally called Beeple. This art was a collage of Beeple’s first 5000 artworks, this was his work over the past 13 and a half years!! This art was bought by an Indian named Vignesh Sundaresan, who identified himself as ‘Metakovan’. He is a Singapore based blockchain-entrepreneur and an angel investor.
Everydays: The First 5000 Days, Image: Beeple
2) Crossroads
Yet again a Beeple masterpiece was sold for 6.6 million USD. Crossroads was based on the 2020 US Presidential elections. It was an animation video that was 10 seconds long. The initial selling price was $66,666.60, a secondary sale was made on the nifty gateway for $6.6 million.
Crossroads, Image: Beeple
3) Earth & Mars:
These are two NFTs created by Grimes with her collaborator, Mac Boucher. 388 editions of Mars and 303 editions of Earth. These were sold for around 6 million USD. Earth is an animated video that is 36 seconds long and Mars is 32 seconds long. Grimes added some sick music to it, making each edition worth 7,500$.
Earth, Image: Nifty gateway Mars, Image: Nifty gateway
4) Logan Paul’s NFTs
Logan Paul partnered with a company called Bondly to distribute these tokens. He released 3000 NFTs for 1 ETH, around 2000$ at that time. Logan made 1 million USD within the first 30 minutes of releasing the NFTs. They were called logan box break NFTs, these were sold ahead of the big pokemon unboxing stream. Cut to after the stream, the break moments from the stream are sold as NFTs now. This shows the potential of NFTs and the craze.
If you want to explore the rankings of different NFTs, do it here.
How do I buy/sell NFTs?
There are a lot of ethereum markets that accept NFTs now. First, you’ll need to create an ethereum - wallet, such as metamask. You’ll then need to connect your wallet to platforms that trade NFTs. I’ll list down a few of the famous ones:
● Nifty Gateway
● Opensea
● SuperRare
● Rarible
● NFT Showroom
The hype is real, it is only gaining popularity as you read. If you are an artist, why not mint somemoney with your art? Many people think the idea of NFTs is absurd and believe it is just anothercrypto-based nonsense. In the end, it is up to you to catch up with this trend or not, arguably this maynot be short-lived. But let us see how this goes.
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