NFTs are extremely hot in the online market right now in both a creative and financial capacity. This relatively new technology has changed the art world and is flooding it with money and opportunities.
What Is an NFT?
NFT stands for “Non-Fungible Token.” It operates very similarly to cryptocurrency like Bitcoin. Many of them are part of the Ethereum blockchain, although not all. It basically allows for creators to have “originals” of their digital artwork. Of course, NFTs don’t stop at art—at some point, there might even be concert ticket NFTs.
NFTs aren’t just short sports clips or pixelated cat gifs; almost anything in the form of a digital file can be one. In fact, Jack Dorsey, the founder and CEO of Twitter, sold his first tweet as an NFT.
A Brief History
In 2008, a person under the pseudonym “Satoshi Nakamoto” created the idea for a decentralized digital currency that didn’t rely on any government or bank. They called it Bitcoin, and the concept cut out the middleman.
In January of 2009, the blockchain was launched, and the first transaction was made. However, it was just a test, and Bitcoin didn’t have any real value yet. The first real transaction that established Bitcoin’s real-world value was done by negotiating for two pizzas.
The two pizzas cost $25 in real money, and the two parties agreed on 10,000 Bitcoins. This translated to Bitcoin being valued at $0.0025. That’s 4 Bitcoins per cent. The value of the cryptocurrency was completely arbitrary and negotiated on online forums.
In 2010, Bitcoin became available on exchanges and was now more accessible to the public. By 2011, the price had finally reached the perceived and agreed-upon value of $1.00. Today, Bitcoin’s price stands at over $54,000 per coin—but this fluctuates constantly.
Between 2012 and 2013, the very first NFTs came about in the form of “Colored Coins.” They were essentially smaller denominations of Bitcoins and were used to represent many different kinds of digital assets like digital collectibles and other types of property like shares in companies.
The NFT Today
NFTs really gained serious momentum in January this year thanks to companies like NBA Top Shot and CryptoPunks. It’s all thanks to perceived value and hype. Technically, these tokens don’t have any inherent value, but they do because we say they do.
NBA Top Shot became wildly successful recently and has sold over $230 million in professional basketball highlights as of February 2021. Basically, these digital collectibles are the new trading cards.
Earlier this year, a new record was set for the highest sale price of an NBA Top Shot NFT; it was a clip of LeBron James emulating a dunk Kobe Bryant was famous for in his honor. It sold for over $387,000.
CryptoPunk NFTs are pixelated digital art pieces, and one just sold for nearly $12 million. The piece in question, CryptoPunk 7523, is a pixelated blue alien wearing a red hat, a facemask, and gold earrings. Believe it or not, the top ten CryptoPunks ever sold were all valued in the millions.
In March of 2021, NFT history was made when Mike Winkelmann, aka digital artist Beeple, sold a piece of NFT artwork called “Everydays: The First 5000 Days” for over $69 million.
The future of NFTs is relatively uncertain. Tech bubbles have been created and popped before due to excessive speculation, and it would be foolish to think that NFTs are somehow immune to that possibility.
Most of us probably didn’t predict how valuable Pokemon trading cards would become. Those cards we traded for candy bars in the schoolyard are now valued in the thousands. For all we know, NFTs may have the same fate as Beanie Babies.
The thing that makes NFTs fairly unique in the space of collectibles is that almost anyone can make them and sell them. This makes the value of these digital items more difficult to understand.
How To Create an NFT
Luckily, creating your first NFT is pretty straightforward. You’ll need to design your piece and then decide what blockchain to have your work issued on. Then, there is the process of marketing and selling your NFT.
When you go out for a cup of coffee and pay for it with your debit card, there are multiple parties involved with the transaction process: your account, one or two different banks, and the shop’s account.
With decentralized currency like Bitcoin, there are no banks or governments involved. Transactions are peer to peer and logged on a public record permanently. It’s sort of like each Bitcoin has a serial number that is logged and tracked through many computers connected to the internet that constantly cross-reference each other for discrepancies.
NFTs are sold on a wide range of sites. In the high-stakes world of purchasing NFTS, most people are flocking to platforms like Flow, Ethereum, Axie Infinity, and World Asset eXchance (WAX).
While digital wallets are all the rage, this isn’t exactly an Apple or Google Pay situation. Instead, buyers must use cryptocurrency. This highly volatile type of digital currency is complex and difficult to predict. Each site can have its own rules. You may have to buy dollars to use from a particular site (like Axie) or use a digital wallet like MetaMask or Bitski.
How To Sell and Buy NFT Artwork
It’s easy to assume that iconic artwork like Leonardo da Vinci’s Mona Lisa and Edvard Munch’s The Scream has staggering monetary value (after all, these and similar paintings were targets of famous art heists).
It’s a little harder to comprehend how a distorted drawing of The Simpsons is one of the highest-selling NFTs of all time.
Basics of Selling
If you have an iconic internet moment or an interesting piece of art, you might just be sitting on the next multi-million dollar NFT.
Here’s how to do it:
- First, you have to “mint” your NFT. This happens through the website of your choice, and the site requires you to pay certain fees for this service.
- Make sure to load up funds on your digital wallet (also called a crypto wallet).
- Upload the media file to the site of your choice (OpenSea, AtomicMarket, or Mintable).
- Set the price — this price is set in cryptocurrency (Bitcoin or Ethereum are popular).
- Wait for the crypto market to soar and price accordingly.
- Profit (hopefully).
Basics of Buying
If you’ve got cash to burn and are in the market for the best fun fact you can share at a future party, here is how to buy an NFT:
- Join a market dedicated to buying and selling NFTs.
- Acquire a digital wallet (also called a crypto wallet). Every market basically uses a different digital wallet, and, like gift cards, these wallets don’t work at competing sites.
- Go to the site of your choice. You have to decide if you want to buy at an auction or do a buy-now transaction.
- Keep in mind that crypto is always in a state of flux, so watch the market to make sure you get the most bang for your buck. When ETH goes down, sellers are more likely to try to sell in case the market takes an even deeper dive.
- Pick a piece: either keep an eye on the auction or buy immediately.
Perhaps the new version of the art collector and aficionado is the NFT collector that delves into the world of digital artists. If you’re interested in ownership of one of the following NFTs, we’re sorry to say these particular ones are off the table (at least at the moment).
The Nostaglia NFT
It’s no secret that nostalgia is pretty powerful. If you can remember back to the internet days of 2007, you might recall a viral YouTube video called “Charlie Bit My Finger” (sometimes called “Charlie Bit Me”). This 55-second video made the rounds on everyone’s Facebook. In fact, way back when, this iconic and hilarious clip was the most-watched video on all of YouTube.
“Charlie Bit My Finger” starred Harry, age three, complaining that his younger brother, Charlie, age one, bit him on the finger. As of July 2021, this video is pushing at upwards of 900 million views.
In an auction in May of 2021, Charlie and Harry’s parents sold the NFT of this clip for £538,000. That translates to $728,807.32 in US dollars. The boys have stated that they intend to use these funds to attend university.
The Ironic NFT
In the world of street art, no name is as prominent as Bansky. Known for iconic pieces like “Girl With Balloon” and “Flower Thrower,” this artist is no stranger to controversy and drama.
To this date, two Bansky NFTs have hit the open market, although it should be noted that the artist themselves was not involved in either of these big-ticket transactions. In what many deemed a tasteless stunt, Injective Protocol (a Blockchain company) and the owners of the Bansky piece burned Bansky’s 2006 screenprint called “Morons (White).”
Injective Protocol forked over $95,000 for the work to burn it and then sold the NFT of this piece. The NFT of this piece taken before it was set aflame brought in a huge sum of $380,000.
The seller noted that they chose this piece due to Bansky’s inscription on the original screenprint. It reads, “I can’t believe you morons actually buy this shit.” Some appreciated the irony, while many others found the whole debacle to be rather unfortunate.
The Art Heist NFT
In August 2021, a Bansky work was once again involved in the NFT market, but this one was certainly less than savory. A hacker gained access to Banksy’s website, and the hacker then auctioned off a Bansky NFT on OpenSea. However, this NFT wasn’t an actual NFT: it was a total fake.
The hacker was able to sell this fake NFT for 100 Ethereum, which equates to $336,000 in real-life dollars. In a surprisingly wholesome turn of events, the scammer returned all the money to his victim.
Art in the Age of the Internet
The first computers were basically as powerful as the calculator you used in Geometry class. When the internet took off, some people barely noticed its presence and called it a fad.
Now, pictures on the internet are selling for similar prices to oil paintings that take years to produce. If one thing is for sure, the internet is astounding. It constantly finds new ways to surprise, entertain, and educate us.