The NFTs (non-fungible tokens) are not something really new, they were here with us starting the ICO craze in 2017, but somehow, after 2020, they have started a new, upgraded life, and are considered as one of the next big things. They are a breed of unique digital assets — non-fungible, which are different from regular cryptos which are fungible (one can easily be replaced with the others). What is hard to digest for most of us is how these digital assets which range from art and music to in-game assets and luxury fashion, are selling like high-priced diamonds, sometimes in the range of hundreds of thousands, and even millions of dollars.
There are many famous examples around us, like The Nyan Cat meme that was auctioned for $600,000 in February 2021 or Jack Dorsey’s first tweet that was auctioned for $2.5 million, in this case, the owner wanted to resell but only got bids of around $7k showing the high volatility, and potential for non-real hype of this specific asset class.
I would say that this digital asset class — NFTs (non-fungible tokens) is here to stay, but some of them will become really valuable, but others will just be ways to make a quick buck (or a million of dollars) by some “smart”, and non-ethical marketers, and entrepreneurs.
In a nutshell, what are NFTs?
“For example, in the real world if you buy the Mona Lisa…your friend can make a copy of it. But there’s an art expert who can come to verify that it’s the original one…In the digital world, if you have an image and you make a copy of it, no one knows who has the original one. But now that’s possible thanks to blockchain technology [and NFTs]”
Nikil Viswanathan (CEO at Alchemy)
NFTs have the ability to convert a piece of digital art — visual, audio, video into a unique, verifiable digital asset which are easy to be traded on the blockchain. Most of the non-tech people around us … simply don’t get this idea, but the creators who got in early had reaped the benefits from the investors being ready to pay top prices for NFT variants of regular works.