Back in March of this year, an artist named Beeple sold a piece entitled “EVERYDAYS: The First 5000 Days” for $69.3 million. The sale is noteworthy for being the third-highest sale for a living artist’s work. But it is also notable for being the highest sale ever (currently) for an NFT.
This amazing sale thrust the burgeoning NFT market into the spotlight. For some, NFTs are exciting and offer the potential for great creativity and record-breaking transactions. But for others, NFTs are just confusing.
For those unfamiliar with the concept, we’ll do our best to explain:
What Are NFTs?
NFT stands for non-fungible token. Not a very sexy-sounding term, but it does distinguish this kind of digital file as being entirely unique and irreplaceable, even by something that might look exactly like it. It can be a digital artwork, a GIF, music, gaming items, etc.
But wait, you might say. I’ve seen images for the same NFTs all over the place. That doesn’t sound unique.
That’s because the uniqueness lays not so much in the image shown as it does in the code used to create it. To achieve this singular level of propriety, NFTs are coded in a certain way to prove that they are the one and only original creation. They are coded in much the same way as cryptocurrency, using blockchain to make it impossible for others to replicate.
You could think of it kind of like owning a fine art painting. There may be thousands of prints made off of it, but there is only one verifiable original. You own the masterpiece, while everyone else can only get a copy.
Who Is Creating NFTs?
Lots of people, really. While most popularly known as an outlet for digital artists, the breadth of what an NFT can be means that pretty much anyone can do it. Celebrities are putting up one-of-the-kind headshots. Originators of social posts are having code attached to make them NFTs. Video clips of impressive sports plays. Virtual jewelry. Etcetera. Etcetera.
Prices for these files range from mere tens of dollars all the way up to the aforementioned $69.3 million. Specific online outlets, like OpenSea.io, Rarible and Foundation, make them available for purchase.
Who Is Buying Them?
Anyone with money or, rather, crypto to spend can purchase an NFT. In order to possess an NFT, a buyer needs to have a digital wallet similar to that for cryptocurrency. After making the purchase (again, most often with Bitcoin or similar), the buyer will receive the specially coded file and store it securely in their wallet.
As the owner of this one-of-the-kind work, the buyer then has the power to do whatever they want with it. They could resell it to someone else, issue licensing rights, and so forth.
Are NFTs a Good Investment?
NFTs have only been around since 2014. So, it’s still a little soon to tell if they will stand the test of time and/or gain in value. That being said, even if you don’t have a lot of disposable income to play around with, you can still get into the game if you want. Given the wide range of price points and types of NFTs, you could spend whatever amount you wouldn’t really miss and just see what happens.
You could be pleasantly surprised. Or, if NFTs do wind up going belly up like so many fads before, you won’t be out so much that it hurts or you go bankrupt. And whether or not it turns into something that someone else wants to pay for, you would still have a piece of art that no one else has.
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Photo Credit: Mininyx Doodle – www.shutterstock.com
