PUBLISHED 17 Sep 2021
CATEGORY: Fintech , Cryptocurrency

NFTs and Digital Collectibles: All the Hype of the Blockchain-based Trend

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NFTs have been making headlines lately, some selling for millions of dollars, with high-profile memes such as Nyan Cat being sold as a one-of-a-kind NFT crypto art. The famous, Charlie Bit My Finger video on YouTube, with a record 885million+ views, sold as an NFT for US$760,999.

More recently, Twitter founder Jack Dorsey sold his first tweet as an NFT for a staggering US$2.9 million. The tweet, "just setting up my twttr," had been publicly available as a free digital item for nearly 15 years, but it was auctioned off by Mr Dorsey as a signed NFT for charity. The Malaysia-based buyer Sina Estavi compared the purchase to buying a Mona Lisa painting. The tweet was bought using the ether cryptocurrency, a digital currency to rival bitcoin.

An NFT, or non fungible token, is a digital asset that represents a real-world object. Three types of NFTs exist and they can technically contain anything digital, including drawings, songs, animated GIFs, or things within video games, with ownership documented using blockchain technology or DLT. There are also digitally native NFTs, which have ownership rights to the work constituting the NFTs, and NFT metadata, which involves the NFT providing representation of ownership for metadata files related to the internet.

Although they’ve been around for a while, NFT digital artwork started to gain attention when digital artist Beeple auctioned off his artwork at a Christie’s auction in March 2021 for US$69million. NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them using blockchain. They are frequently bought using virtual currency and are generally encoded with the same underlying software as many cryptocurrencies.

 

NFT's influence on the creative scene

NFTs are unique assets that grant collectors full ownership over their digital items. NFT ownership as a digital asset is changing how art is created, perceived, and owned. CryptoArt began when two software developers created a quirky art project called CryptoPunks. Now regarded as the birth of the movement, it sold at Christie’s auction house. As of early April 2021, over 8,000 sales had been recorded in the previous 12 months, with an average sale price of 15.45 ether ($30,412.40). The total value of all sales is currently 127,360 ether ($251,620,000), and it’s growing daily.

On the music scene, Kings of Leon are the first band to release their album cover as an NFT. The series is called “NFT Yourself” and includes a special album package, live show perks, front-row seats for life, and exclusive audiovisual art. They aim to use blockchain technology to bring value back to music and improve connection to their fans. In the sports world, NBA’s “Top Shot” is a blockchain-based trading card system that has generated over US$230million of nft crypto.  

 

What does NFT mean to the blockchain industry?

NFT is a great way to get non-crypto users to think about dipping their toes into the water. Using a digital wallet to purchase products is now commonplace, so it’s not too much of a leap for new crypto exchange users. NFT’s are helping to accelerate crypto growth. In March 2021, cryptocurrency blockchain marketplaces on which you can buy and sell NFTs grew exponentially to $1 billion in sales. NFTs have gone from being buzzwords used by traders to digital assets across the globe. Owning a crypto wallet is on the rise, as NFT’s have managed to attract newcomers to the technology in a novel way. 

When a reworked Andy Warhol computer image from the 1980s sold for $870,000 at a Christie’s auction, it was guaranteed that NFTs held value. In May, people were buying and selling an estimated 85,787 NFTs (total value US$5.8 million) per day, according to application tracking firm DappRadar. An NFT is a digital object (computer code and data) that proves ownership is also gaining popularity. Whether online or in reality, this type of NFT shows promise. Just like any type of technology, NFTs can offer more efficient ways of doing business, while attracting attention to the use of cryptocurrencies. It seems that art and technology are a definite match!