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What are NFTs?

13.05.2021

What are NFTs, and why are they worth crazy money?

Non-fungible tokens (NFTs) are a real phenomenon that became all the rage when Beeple’s creation Everydays: The First 5000 Days sold at Christie’s for an unbelievable $69 million. As if that isn’t mind-blowing enough, the winning bidder has received no actual piece of art – after all, the creation is a digital art piece. What then?

The answer is – a digital token, NFT.

What Does an NFT Stand For?

If we just say non-fungible token, it will hardly become any clearer.

A fungible asset is something that comes in units that can be interchanged. Think of the money that we use daily.

NFTs, on the other hand, are unique digital tokens that can’t be replaced with anything else. By unique, we mean having unique properties. These digital tokens represent ownership of digital artwork – literally anything from art to music and video in the form of JPGS, MP3s, videos, GIFs, and other common formats.

The NFT technology was created in the mid-2010s but became mainstream in 2017 – thanks to CryptoKitties.

CryptoKitties is a website to buy and “breed” unique digital cats, but with crypto.

How Does it Work?

Most NFTs exist on the Ethereum blockchain, and represent a piece of digital artwork. In this case, a piece of artwork gets tokenized, and a digital certificate of ownership is created.

Forging these certificates is impossible as all the relevant data is stored on the blockchain that, in turn, is maintained by a multitude of computers.

It’s surely interesting to know that the pieces of digital artwork, for which NFTs are created, can be used – to be more precise, copied or downloaded – by everyone. However, the ownership of the work cannot. 

Crazy Examples of NFTs

As crazy and real as it can get.

The very first example of NFTs was through a project CRYPTOPUNKS. This project enabled its users to sell, buy, and store about 10,000 unique collectible characters. The proof of ownership is stored on the Ethereum blockchain.

Hold on tight as we just got started.

Another amazing example is a quick-to-make GIF Rainbow Cat sold by NyanCat for $690,000. You should definitely google it.

Tell Me More!

It’s not just individual artwork. NFTs proved to be an attractive revenue stream also for brands. For example, Taco Bell sold branded GIFs and images on one of the marketplaces. The haul of 25 sold out in just 30 minutes. 

It’s worth mentioning that each NFT held a $500 gift card that the original owner could spend. The fact may well explain the hype. Amazingly though, these TacoCards are now being sold on the secondary market. Can you guess what the most expensive card is worth? $3,500. No kidding.

Here’s another one. The first ever digital home called Mars House has recently been sold for a whooping $500,000. 

Mars House, designed by Toronto artist Krista Kim, is claimed to be the first digital house in the world. An architect and video game software assisted its creation.

The lucky owner will be able to explore the luxurious house on Mars through virtual reality.

Yearning for more? Trevor Andrew drew a Gucci Ghost that sold for $3,600. We can’t even.

To add a cherry on top – Twitter co-founder Jack Dorsey sold off the first-ever tweet for an eye-watering $2,915,835.47. What does the tweet say? Just setting up my twttr.

How do I Buy NFTs?

Looking to buy your first NFT? Here are some tips on how to do it.

For starters, you need a digital wallet to be able to store NFTs and crypto. Then, it’s likely you’ll need to buy some coins – which one depends on what currencies your NFT provider of choice accepts. You can buy crypto safely on CoinMetro and then move it from our exchange platform to your wallet.

Top NFT Marketplaces

Is your wallet all set up and funded? If yes, let’s have a look at the largest NFT marketplaces to sell, buy, and invest in art and collectibles:

  • OpenSea.io: This platform is the first and largest marketplace for user-owned digital goods, which include collectibles, gaming items, domain names, digital art, and other assets backed by a blockchain.
  • Rarible: Rarible is an open marketplace that allows artists and creators to issue and sell NFTs.
  • Foundation: Foundation brings digital creators, crypto natives, and collectors together to move the culture forward.
  • SuperRare: SuperRare is a marketplace that allows people to buy and sell single-edition digital artwork. Each piece of artwork is authentically created by an artist in the network and tokenized as a crypto-collectible digital item that can be owned and traded.
  • AtomicMarket: Unlike all the marketplaces listed above, AtomicMarket is a shared liquidity NFT market smart contract used by multiple websites. Shared liquidity means that everything listed on one market also shows on all other markets.
  • Portion: Portion is a marketplace that connects artists and collectors through blockchain technology to sell, invest, and own art and collectibles. Portion makes it easy and with complete transparency. This marketplace also includes the Artist Community, which is a global network of decentralized artists and creators.

Is the NFT Market Big Enough to Invest?

According to the NFT Report 2020, the NFT market grew by 299% in 2020. Then, it’s value was $250 million.

However, the first quarter of 2021 has already seen sky-rocketing sales.

What’s Next?

If you want to explore the topic of assets and securities, we suggest you start with What are Securities in 2021?

Itching to invest in NFTs? Make sure to do your research before you do. Equally important, choose transparency above all.

If, however, you feel like “traditional” investing in crypto is your thing, sign up with CoinMetro to become part of the secure, reliable, compliant, and transparent crypto market.

There are plenty of options and features to discover and be amazed – trading on an innovative and user-friendly crypto exchange platform, pairing with pro traders through the copy trading feature, trading on margin with a 5x leverage, investing in securities, enjoying the best customer service in the industry, and many more!

We deliver to your needs and expectations.