NFT’s have basically shocked the world and created a new revolution where today, we now see hundreds of thousands of artists venturing into this world of Rare Art infused with the technology of blockchain and cryptocurrency. This is the first time in the history that art has been able to make more money than technology itself and the fact that art is now a profitable career for many aspiring and talented artists.
Why are NFT’s so valuable and the main reason is because NFT’s are digital assets that cannot be duplicated, replaced or replicated as the ownership of the digital asset is recorded on the blockchain. Due to this NFT assets or Digital assets get a form of protection from unlimited reproduction and piracy as once a digital asset is converted or “minted” as an NFT, there’s no possible way for hackers or thief’s to claim the ownership. Because of this, now due to the introduction of NFT’s, artists and creators can now impose value to their creations digital assets.
This was the problem of piracy that the art industry was facing for decades, while even governments of the world like the European Union tried to stop the problem of piracy by passing a law called “General Data Protection Regulation (GDPR)”, however, although data privacy was strict in Europe but for the rest of the world, it was impossible to impose or bring value to a digital asset.
What are NFT’s?
NFT or full form Non-fungible-Tokens in the simplest terms are essentially cryptocurrency tokens that can be bought and sold in the blockchain network. They are based on the blockchain network called Ethereum and they can have a price. Which means they are indeed cryptocurrency tokens just like Bitcoins, Ethereum and Doge coins.
However, NFT’s are slightly different from the traditional cryptocurrency tokens. They are essentially “Non-Fungible”.
The word “Fungible” means “(of goods contracted for without an individual specimen being specified) replaceable by another identical item; mutually interchangeable.“. Bitcoins and many other cryptocurrencies are “Fungible” and they can be freely exchanged with each other without having any impact on the value of the cryptocurrency. For example, you have 2 Bitcoins, if you give one to your friend, he will have the exact same Bitcoin as yours. There won’t be any impact on value of the Bitcoin as he won’t have a higher value bitcoin nor a lesser value bitcoin. Both of you will have the same exact coin.
NFT’s on the other hand are different as each NFT’s are “Non-Fungible”. NFT’s can be anything from an Original Artwork, Trading card, music, videos or any Digital assets or collectible that when these digital assets are Tokenized/Minted or converted into an NFT, they gain the quality of being irreplaceable as they cannot be duplicated, replicated or be mutually exchanged for another NFT.
Each NFT is unique and there can be only one of it’s kind and each NFT gets a Token ID and it’s data is stored in the blockchain network. This is also another reason why NFT’s are so valuable because NFT’s unlike Bitcoin can hold additional information that can be stored in the blockchain. This additional information includes data of ownership of the NFT, history of ownership, description of the NFT, and so on. Due to this, owners can be traced and even the original creator of the NFT can be traced which completely shuts down the dangers of piracy and unlimited reproduction.
Is NFT a Cryptocurrency?
The question will still arise, is NFT a cryptocurrency? and the answer is yes and a no. Yes, because NFT in its core works like a token which is based on the blockchain network. Just like Bitcoins, NFT’s can also be minted as they are also tokens so they function like a cryptographic token.
However, due to the nature of NFT’s and the fact that they are Non-Fungible, NFT’s cannot be mutually be exchanged like other Crypto Tokens. Due to which each NFT token has a specific value that is either determined by the owner itself or the collector of the token. While for Bitcoins, the value is determined by the market of demand and supply.
So, we can say that yes NFT does function like any other Crypto Token but it cannot be used as a cryptocurrency.
Most Valuable NFT’s of 2020 and 2021
The first industry that was able to fully utilize the technology of NFT’s was the art industry. With art now having the power to become extremely valuable and rare, we could see a lot of artist making a lot of money from their artworks.
Starting with Beeple, who became the first artist to be known as one of the worlds richest artist by selling NFT’s. On March 11th, 2021, Beeple sold his most valuable collection called “Everyday: The First 5000 days” which consisted of all his 5000 artworks and painting he created everyday since May 1, 2007. He sold his collection for a whooping $69 million dollars in the auction house, Christie’s.
This was the first time, people and the NFT Community realised that NFT’s were really a thing and it was a hype that’s not going to end any sooner. Following that month, In January and February alone, over $300 million dollars worth of NFT’s were sold. While, NFT marketplaces like OpenSea saw a huge spike in their monthly sales, from just $1.5 million to over $100 million in NFT sales. Many other NFT platforms also saw similar growth patterns.
The fact that Beeple alone was able to sell more than $100 million dollars worth of NFT’s while other Crypto Artists like CryptoPunks were able to sell over $30 million dollars worth of NFT’s and they were consistently selling their NFTs for $30,000 – $100,000 dollars.
Another notable NFT sale was from Twitter Founder Jack Dorsey, who sold his first Twitter Tweet as an NFT for a staggering $2.9 million dollars, while even New York Times sold one of their articles as an NFT for $560,000 dollars. This was something very different that had happened in the NFT scene as now we know the fact that actually anything or any form of Digital Asset can be turned into an NFT and sold.
While, one of the biggest industries that was fully utilizing NFT’s was the Crypto Gaming Industry. Crypto Kitties, which is a crypto game established much earlier than 2021, saw huge success with NFT’s. With some of their NFT’s selling for $390,000.
With this, we could see what a small change in technology can literally create a revolution and the best is still yet to come.
We are now hearing the finance company VISA, to officially include Cryptocurrencies into their system.
There is no doubt, NFT’s are definitely going to change the world.
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