Cryptocurrencies are currently recognized by the government and accepted by major companies around the world. Cryptographic coins like Bitcoin and Ethereum have helped the rise of new digital assets. One such digital asset is the NFT. In the first half of 2020, NFT sales were € 12.1 million. Combining new technology and art, this new industry surged “towards the moon” at € 9.4 billion at the end of the third quarter of 2021.
What is an NFT?
The acronym NFT, which is popular in both the financial and art worlds, stands for non-fungible token. An NFT is a unique identifier that can prove ownership of a digital product. They make digital art pieces and other collectibles a unique, verifiable asset that can be easily traded on the blockchain.
Until the advent of NFTs, digital art didn’t hold the same value as Monet and Picasso’s masterpieces. This is because it’s almost impossible to distinguish the original because you can easily duplicate the digital with the click of a button.
Sacha Jafri explains how the software makes this possible. “There is software that scans artwork. It cannot be forged. It is absolutely impossible. There is a difference because when you scan a blank sheet and another blank sheet, this software recognizes the difference. Two blank sheets.”
The most expensive NFT
Phenomena in the NFT market are limited art collections such as Cryptopunks, Bored Ape Yacht Club and Cool Cats.
Each of these collections is limited to 10,000 pieces of digital art. Thousands of NFT artwork are sold every day. The rarer the artwork, the higher the price you can get, like the traditional works of art found at Christie’s and Sotheby’s auctions.
The remaining one-third of the 10,000 Cryptopunks collection has recently sold for over € 472 million. This pixelated artwork shows the potential for future NFT sales.
Why do you need to invest in NFTs?
You might wonder why someone invests in something that can be easily duplicated on mobile or laptop. Expensive NFTs are used as profile pictures for social media accounts to show wealth, just as businessmen wear expensive watches.
Many people are buying into the world of NFTs to become part of the online community. Owning a particular NFT gives you access to exclusive content and live events.
Digital investors want to make a lot of money in a short period of time using the NFT marketplace. In addition, the business models of many industries have been reshaped to incorporate NFT transactions. An NFT can be bought and sold multiple times, but the buyer must pay the original owner or creator for each sale. Loyalty fees are usually around 10 percent.
Charles Morin, co-founder of Jumy, told Euronews:
Whether your involvement in an NFT comes from financial gain, community participation, or simply a love for works of art, the future of NFTs looks prosperous.