NFTs have taken digital art and collectibles by storm. NFTs are tokens used to represent ownership of unique items, including drawings, collages, music, or any other unique digital property. NFTs are “one-of-a-kind” digital assets that can be purchased and sold like any other piece of property but have no tangible form of their own.
- Definition – NFT stands for “non-fungible token.” In economics, a fungible asset is something that can be readily interchanged, like money. Non-fungible means it has unique properties and cannot be readily interchanged with something else. Ethereum’s ether (ETH) coin is a cryptocurrency, like bitcoin, dogecoin, or litecoin, but its blockchain stores extra information that tokenizes art, collectibles, and even real estate. Ethereum was architected to facilitate blockchain-based smart contracts, explaining why most NFTs are based on Ethereum.
- NBA Top Shot – One of the first high-profile NFTs was a video highlight known as a “moment,” which showed a LeBron James dunk. The NFT sold for $213,000 on Feb. 6, 2021, via NBA Top Shot. NFTs certify ownership of an original asset, even though everyone can see and download the same video clip for free. On Feb. 19, artist Chris Torres sold a version of his 10-year-old Nyan cat for $534,159 or 300 ether. On Feb. 28, Canadian musician Claire Elise Boucher, known as Grimes, sold $6 million worth of artworks on Nifty Gateway. Those three sales were topped on Mar. 11 when Christy’s auctioned an NFT of a collage of 5,000 mostly digital illustrations by Mike Winkelmann, better known as Beeple, for $69 million.
- Mainstreaming – Proving that the NFT concept is mainstreaming, fast-food chain TacoBell got in on the action offering the NFTacoBell on NFT marketplace Rarible.
Members of the voice-only social network Clubhouse know that NFTs are a hot topic these days, which is music to the ears of all artists. What we’re witnessing is a fundamentally new trend, the digitization of assets.