Blockchain news somehow always has the capability to leave me thinking, ‘’Um… what the hell is going on here???’’
And, that’s exactly what I experienced after reading about the Nyan Cat GIFF being sold for $600,00, a picture of Lindsay Lohan’s face reaching $50,000 at an auction, or a tweet by Jack Dorsey selling for a whopping $3 million.
And, now that NFTs have exploded in popularity, the situation has become even more intricate.
Tens of millions of dollars were paid for pictures of apes, corporate cash grabs have escalated and I’ve also seen endless headlines about NFT projects being hacked for millions of dollars.
And, although people are throwing this word around like it’s confetti, I’m pretty sure many of you are asking…
What the * is an NFT anyway?
Let’s start with the basics.
What is an NFT?
NFT stands for a non-fungible token which means that it is unique, one of a kind and that it can’t be replaced with something else. Think of it this way, Bitcoin is fungible which means you can trade one Bitcoin for another Bitcoin and you will be left with exactly the same thing.
How do NFTs work?
Like cryptocurrencies, NFTs exist on a blockchain (a distributed public ledger that records transactions), and although other blockchains support NFTs as well, it’s more typically held on the Ethereum blockchain.
Now, the interesting thing about NFTs is that they can be both tangible and intangible items, meaning that it can be something that you can physically touch (buildings, inventories, copy machines) as well as something that holds value but can’t be physically touched (trademarks, domain names).
Essentially NFTs are the same as collector’s items be it baseball cards, art, or comic books, but in digital form. So, instead of receiving actual works of art to hang on your wall, you’ll get the works of art in a digital file instead.
So, you mean people will actually buy my good tweets? Well, maybe. Anyone can sell anything on an NFT marketplace, even a scribble in paint, but it’s not necessarily going to sell for millions of dollars.
This leaves me with my next question…
How exactly do you give someone millions for a jpeg on the blockchain?
There are marketplaces that allow you to buy and sell NFTs, like Rarible, Nifty Gateway and even Binance have jumped on the bandwagon but the one that’s like the Bitcoin of marketplaces is undoubtedly OpenSea.
It launched back in 2017 (which is ancient in NFT standards) and is almost like the Amazon of NFTs. And wait for it… It’s worth 13 Billion Dollars!!!
What makes OpenSea so successful is that it’s not as curated as other marketplaces that have a kind of stamp of approval on the NFTs they host. At OpenSea they show you everything on the blockchain and it also has these special ordering tools, so everything migrates which makes the process very simple.
Should I invest in NFTs?
It’s the same as asking:’’Should I buy Bitcoins.’’
Investing in NFTs themselves is like making a speculative bet, and OpenSea for example is like a casino where all these bets are happening.
And the fact that there are a lot of bets happening at the moment, just shows you that there are many people that believe that this will be the future of collecting.
Like the random person who paid almost $390,000 for a 50-second video by Grimes, or whoever paid $6.6 million for a video by Beeple.
In my honest opinion, it’s a gamble. You’ll either be able to flip it for millions of dollars or you’re going to need to HODL and hope for the best.
Whoops, I was busy right-clicking on the video to download the exact file someone else paid a buttload of money for.
Confused you say?
Here’s the awkward bit. Because NFTs are digital files, they can be copied and saved by anyone as many times as they want so what you’re actually buying is the copy- and reproduction rights, just like buying an original Salvador Dali or a Salvador Dali print.
And, remember I mentioned Beeple earlier. One of his images was also auctioned off a while ago and ended up reaching $69 million, which is (by the way) $47 million more than Salvador Dali’s record price for Portrait de Paul Éluard, sold at Sotheby’s London in 2011.
Are NFTs a fad that’ll blow over?
NFTs started with a big hype and although sales have undoubtedly gone down ever since its peak, I get the feeling that it is a really good concept that just needs to find an industry in which it will thrive.
Like crypto casinos.
But, let this whole NFT business first sink in.
And, then I’ll discuss how crypto casinos can utilize NFTs in next week’s article because it is going to add an entirely new layer of excitement to gambling for sure!
Too curious to wait? Then, in the meantime, go check out what BC.GAME is up to with their latest NFT project. It’s going to blow your mind!