Not-fungible tokens, or NFTs, are the latest cryptocurrency miracle to go mainstream. And after Christie’s auction house sold the first-ever NFT artwork — a collage of images by digital artist Beeple for a whopping $69.iii million — NFTs have suddenly captured the world’s attention.
So what are NFTs?
In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are like shooting fish in a barrel to merchandise on the blockchain.
Although that may be far from simple for the uninitiated to empathize, the payoff has been huge for many artists, musicians, influencers and the like, with investors spending top dollar to ain NFT versions of digital images. For example, Jack Dorsey’s start tweet sold for $2.9 million, a video clip of a LeBron James slam douse sold for over $200,000 and a decade-onetime “Nyan Cat” GIF went for $600,000.
But NFTs aren’t exactly new. CryptoKitties, a digital trading game on the cryptocurrency platform Ethereum, was one of the original NFTs, allowing people to purchase and sell virtual cats that were both unique and stored on the blockchain.
And then why is the NFT phenomenon taking off now?
“Some of that interest is from people who enjoy supporting the work of contained creators past purchasing their works,” Artsy CEO Mike Steib told CNN Business. “Others are intrigued past the idea of taking a digital asset that anyone tin copy and challenge ownership of information technology. The recent headline price records for NFTs seem to have been largely driven by newly minted crypto millionaires and billionaires looking to diversify their bitcoin holdings and more interest to the crypto ecosystem.”
Hither’southward what else yous need to know:
Non-fungible tokens, or NFTs, are pieces of digital content linked to the blockchain, the digital database underpinning cryptocurrencies such as bitcoin and ethereum. Unlike NFTs, those assets are fungible, meaning they can exist replaced or exchanged with another identical one of the same value, much like a dollar bill.
NFTs, on the other hand, are unique and not mutually interchangeable, which means no two NFTs are the same.
Recall of Pokémon cards, rare coins or a limited-edition pair of Jordans: NFTs create scarcity among otherwise infinitely available assets — and at that place’s even a certificate of actuality to bear witness it. NFTs are typically used to buy and sell digital artwork and can have the class of GIFs, tweets, virtual trading cards, images of concrete objects, video game skins, virtual existent estate and more than.
Essentially, any digital image can be purchased every bit an NFT. But there are a few things to consider when ownership one, especially if you’re a newbie. Y’all’ll need to decide what marketplace to buy from, what type of digital wallet is required to store it and what kind of cryptocurrency you’ll need to complete the sale.
Some of the most common NFT marketplaces include OpenSea, Mintable, Nifty Gateway and Rarible. There are also niche marketplaces for more specific types of NFTs, too, such every bit NBA Top Shot for basketball video highlights or Valuables for auctioning tweets such as Dorsey’s currently up for bid.
Merely be wary of fees. Some marketplaces charge a “gas” fee, which is the free energy required to consummate the transaction on the blockchain. Other fees can include the costs for converting dollars into ethereum (the currency near commonly used to buy NFTs) and endmost expenses.
If you’re curious and desire to know more than well-nigh what information technology’s like to buy an NFT, nosotros went alee and bought one. (And aye, it is a cat.)
NFTs are also sold on marketplaces and the process tin can vary from platform to platform. Y’all’ll substantially upload your content to a market place then follow the instructions to plow information technology into an NFT. Yous’ll exist able to include specifics such every bit a description of the work and suggested pricing. Most NFTs are purchased using ethereum only tin besides be bought with other ERC-xx tokens such as WAX and Flow.
Anyone can create an NFT. All that’s needed is a digital wallet, a small purchase of ethereum and a connection to an NFT market place where you’ll be able to upload and turn the content into an NFT or crypto art. Simple, right?
– CNN’s Oscar Kingdom of the netherlands and Rishi Iyengar contributed to this report.