Everything you need to know about NFTs
Have you been hearing a lot about NFTs recently but you have no idea what people are talking about? Keep reading if you’re curious to know more and if you want to be updated on this topic.
It is way too often nowadays that we’re left wondering “What the fuck is that?” and consequently feel stupid af. There are so many new platforms and emerging information that it’s natural to feel like you can’t keep up. That is why in this article we’ll discuss Grimes selling her work for millions of dollars as NFT, Nyan Cat’s NFT adventure, how Twitter CEO and co-founder put up his autographed tweet for sale as an NFT, as well as many others.
But what is an NFT anyway? Here are the main things you need to know:
What exactly does NFT mean? What does ‘NFT’ stand for?
NFT actually means non-fungible token.
Right. Let’s make this clearer. If you’re not sure about the meaning of non-fungible, it means that something is one-of-a-kind and cannot be switched up for something else. For instance, a bitcoin is fungible because you can trade one bitcoin for the other and they’re all still the same. Something that cannot be ‘copied’, therefore, (like a unique trading card) will be non-fungible as you cannot exchange it for anything else that seems the same. It’s like letting go of your Squirtle and getting a 1909 T206 Honus Wagner (which Stadium Talk describes as the “Mona Lisa of baseball cards”).
But how do these NFTs operate?
What you need to remember is that most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency (think Bitcoin or Dogecoin) but its blockchain supports these NFTs that save extra information, which makes them perform differently from, for example, ETH coin. It is also important to mention that other blockchains can invoke their form of NFTs too. (Some have even done so already.)
What are the valuable NFTs though? How do you know what to buy?
Well, NFTs can be anything that is in digital form (can be a drawing, piece of music, your brain downloaded and transformed into an AI, etc.). However, at this moment, the fuss is mainly about using tech to sell digital art.
Let’s put it this way: Dogecoin itself can’t constitute an NFT. However, creating a GIF of a dogecoin can be sold as NFT.
Can you sell your tweets (because, you know, let’s face it, you find them brilliant)?
There is no rule against it technically, but that isn’t really what NFTs are about. NFT is perceived by most as a development when it comes to collecting exceptional art, only it’s digital art instead. That, nevertheless, doesn’t stop people from actually trying to sell ridiculous things like their Tweets, which is exactly what Jack Dorsey did. Twitter CEO sold his very first Twitter post (dating back to 2006) for $2.9 million. Dorsey said he will instantly convert the money from the sale to Bitcoin and the profits will be sent to “GiveDirectly” Africa Fund (a charity that helps people in poverty).
Are people taking it as seriously as art collecting?
It seems like there are a lot of enthusiasts who are ready to pay the big bank for anything they find mesmerizing. Someone, for instance, paid nearly $390,000 for a 50-second-long clip created by Grimes or the individual who paid $6.6 million to own a video by Beeple.
You might be familiar with Beeple because this month the same sold an NFT for the fascinating $69 million at Christie’s (255-year-old auction house) ‒ which, FYI, is $15 million more than Monet’s painting “Nymphéas” sold for back in 2014.
The piece is called “Everydays: The First 5000 Days” and it’s a collage of Winkelmann’s work starting at the beginning of the project when he was posting somewhat crude sketches. It follows the years of evolving digital shapes up through the beginning of this year when he was posting crude political illustrations. Winkelmann shared: “I do view this as the next chapter of art history. Now there is a way to collect digital art.” This is the piece:
The tricky thing is that any regular person can search for the particular NFT content and have it downloaded within seconds on their computer.
Why do people pay a ridiculous amount of money for something that you can also get for free? Well, while it’s true that you can copy a digital file, NFTs are meant to provide ownership of the content, which obviously can’t be duplicated. The artist of the piece can still keep the copyright and reproduction rights, similar to what the case would be if it concerned a piece of physical art. To relate that to tangible art collecting ‒ anyone can purchase a Monet print but there is only one individual who can be the owner of the original.
Don’t get it the wrong way, we’re not trying to be mean to Beeple, however, his work isn’t typical Monet. Well, it appears that it doesn’t matter to many of us. Like whoever paid $3,600 to buy this gif of a Gucci Ghost, which he is currently selling for $16,300.
Don’t the people who collect Monet paintings enjoy them because they can go home and physically touch this piece of art? What’s the purpose of buying NFTs if you can simply download them on your computer and you’ll get the same thing that someone else paid a bunch of money for?
It shouldn’t come as a shock that we’ll do just about anything in this day and age to stay relevant. Now we live in the reality where buying an original Beeple can indeed be considered a huge flex. Coming up with new and innovative ways to show others exactly how rich you are is, after all, the most popular thing of 2021.
What are people getting out of NFTs?
The answer to this question differentiates based on whether we focus on artists or buyers.
If you’re an artist:
If you’re an artist that means you have some talent so congrats on that! Keep it up! You want to check out NFTs as they provide you with a way to sell your pieces easily instead of relying on the market scene. If you think of an appealing digital sticker idea, what are your options? You can’t sell it on the App Store, so you need to find a different way.
Additionally, there is a feature with NFTs allowing the artist to receive a percentage every time his NFT is sold or switches owners. This guarantees that if your piece becomes famous and increases its value, you would also get some of the perks.
If you’re a buyer:
One of the undeniable advantages of purchasing art is that it allows you to support your favorite artists monetarily. The same goes for the NFTs, however, when acquiring an NFT you additionally obtain some main usage rights such as posting the image online or making it your new profile pic. Moreover, you can gloat about how you’re the owner of this piece of work and you get a blockchain entry to prove it.
If you’re a collector:
What you need to know is that NFTs can be managed like you would any other speculative asset, where you acquire it and expect that its value grows in the future. If it does, you can then sell it for profit.
Is every NFT one-of-a-kind?
Yes, every NFT is a different token on the blockchain. However, at the same time, it could be similar to a van Gogh in that there’s one original or it could also be similar to a trading card in that there are sometimes hundreds of numbered copies of the same art piece.
Who’d spend so much money for something similar to a trading card?
This is probably when many get confused. You see, some individuals view NFTs as the future of fine art collecting (basically the super-wealthy people). Others view them as something like Pokémon cards. And while we’re on that subject, Logan Paul recently sold NFTs of a Logan Paul Pokémon card as well as NFT clips that you can find on YouTube for free. But as an NFT, some of the clips were sold for up to $20,000.
But who would buy Logan Paul’s video for $20,000?
There’s a lot of people with bizarre interests nowadays.
Wouldn’t it be funny if Logan Paul tried to sell 50 more NFTs of the same video?
Mike Shinoda from Linkin Park also sold NFTs that were in the form of the songs (he is the first major-label artist to launch a single via NFT) and he discussed NFTs in detail. He thinks some may be in it for the money, but that’s not what he’s trying to do.
Essentially, just be cautious concerning who you purchase from. Experts in blockchain transactions believe there could be attempts to launder money through NFTs, despite the traceable nature of the tokens ‒ or maybe even because of it.
Is it possible to purchase an internet article as an NFT?
It may be possible as it’s a fact that anything digital could be auctioned off as an NFT. The New York Times and Quartz recently sold articles as NFT. deadmau5 sold digitally animated stickers, while William Shatner sold Shatner-themed trading cards (and one of them was an X-ray of his teeth).
Wait, that’s disgusting! Can you buy a person’s teeth as an NFT?
Here’s the thing ‒ it’s practical to use NFTs and connect them to physical objects so you can verify their legitimacy. Nike already holds the patent to the way to verify their blockchain-based sneakers’ authenticity via this NFT system CryptoKicks.
Where to browse for NFTs?
There are currently a couple of marketplaces that are gathering hype around NFTs and they provide individuals with the opportunity to buy and sell. Some of them are OpenSea, Rarible, and Grimes’ choice, and Nifty Gateway.
Cats are so inevitably going to be a part of everything new and popular because they’ve already taken over the world anyway. NFTs are no exception.
NFTs were created because the Ethereum blockchain included support for them as sort of a new standard. Naturally, one of the first things to do was design a game CryptoKitties which enabled users to trade virtual kittens. Pretty awesome, right?
Do you love cats too? You think so?
I thought I liked kittens too but then I read about the individual who spent over $170,000 on a cryptocurrency cat. That’s the kitty, you have to admit it’s cute… maybe not $170,000-type of cute.
These kitties may seem like something silly to you now, but they present one of the most curious features of NFTs and that’s the fact that this art can be implemented in games. Some games even let players have NFTs as items already. One of the games even provides virtual plots of land for sale as NFTs. There is a possibility that players will be able to purchase a one-of-a-kind in-game gun or helmet or any other item as an NFT as well. Now that’s what we call a flex!
Can you pull an Ocean’s 11 on NFTs like you would with art from a museum?
It boils down to this: a big part of the appeal surrounding blockchain is that it keeps a record of each time a transaction happens, which in turn makes it more difficult to steal like you would a painting in a museum. Considering this, it is vital to point out that cryptocurrencies have been snatched away before, so basically it matters how the NFT is stored and whether the victim is determined to put a lot of effort into getting the NFT back.
P.S. Stealing would probably require too much effort and you’d get in trouble so why not stay away from it altogether? It sucks to have something stolen anyway so why would someone make someone go through that? Just don’t do it.
Should you be concerned that digital art might not exist in 500 years?
There is a reason to be concerned. Bit rot is a probable scenario: image quality worsens, file formats can’t be opened way too often, websites are shut down, we forget the password to our wallets. Nevertheless, tangible art in museums is equally if not even more fragile.
Are you interested in maximizing your blockchain usage? Can you buy NFTs with cryptocurrency?
Likely, you may buy NFTs with cryptocurrency. Many marketplaces accept Ethereum. Anyone can sell an NFT and they could request whatever currency they are after.
Is it possible that by trading your Logan Paul NFTs you could also turn out to be responsible for global warming and Greenland’s melting?
There is indeed a connection between these two and you should undeniably be aware of it. Because NFTs use the same blockchain technology as some other cryptocurrencies known to consume a lot of energy, they also drain a significant amount of electricity. Some individuals attempt to fix this, however, most NFTs are still connected to cryptocurrencies which produce a lot of greenhouse gas emissions. There are even a couple of cases where artists changed their mind and removed their NFTs or called off future drops after learning about the consequence they could impose on climate change. You can read more about the topic here.
Lastly, can you set up your underground art cave/bunker to keep your NFTs there?
NFTs are similar to cryptocurrencies in that they are saved in digital wallets (keep in mind that your wallet has to be suitable in that it can support NFT). There is, indeed, the option of keeping your wallet on a computer in a bunker.
NFTs can prove to be quite valuable if you know what you’re doing. So, keep yourself updated and invest wisely! Good luck!