Those who have been following the tech scene and the news from the blockchain world, art, or finance, must have read about the term lately becoming more and more used – the NFT. And if it is somehow connected to the huge amount (millions of dollars for example), it will undoubtfully attract the attention of many who will surely be asking themselves what the heck is this NFT, what’s it for, and why is it so expensive? How do people use it, anyway? Before we assess the question of is it worth investing or not, here are the basic things you need to know about it…
What is it?
The term itself refers to the abbreviation from the non-fungible token. In its essence, it’s a cryptographically protected part of a blockchain, designed and created to represent something truly unique. Being as they are (unique), they have the task to preserve the value and as easy verifiable proof of ownership of other unique forms of digital or “analog” property, such as works of art, collectibles, and other things. They are usually created as unique records based on the Ethereum blockchain and its smart contracts, although there are those based on other standards as well.
Since we’re mentioning blockchain, are they any different than crypto?
Although both are located, or in other words stored in the same place, they have not been made to be the same. As opposed to crypto which is easily exchanged for money, or another type of coin, regardless of who it belongs to – each type of coin has the same value, NFTs are different. Each and every one of them has its own value, and cannot be exchanged for another.
The cryptographic protection in their case though ensures they cannot be manipulated by anyone, but guarantees every single one is unique.
To illustrate – a dollar is like a regular cryptocurrency, each is worth the same and you don’t care what you have, while collector’s items of rare 2,000-year-old hand-minted Roman coins would be a counterpart to NFT, i.e. each would have its own unique characteristics, origins, and value.
How do you buy and sell them?
These irreplaceable, unique tokens are bought and sold just like any other digital asset. Transactions take place through specialized exchange offices, assets are stored in a digital wallet, and records of them are permanently stored on the blockchain – a distributed ledger that anyone can check but cannot change on their own. Theft of such a work of art is just as unlikely as an unauthorized change to the network they’re stored on – so they are fairly secure.
What do you get with them?
Purchasing one of these gives you ownership of certain digital or real-world assets. Although anyone can view or store a digital image, video, or tweet on their computer, only a collector who has purchased this type of asset can claim to be its real owner. This is exactly what collectors have been wanting, not caring about whether someone else will enjoy their property at the same time.
The rise in their popularity in recent times and the consequent increasing amounts that people pay for them suggest that this form of a digital asset could be the future of collecting. Of course, skeptics believe that this is the latest “bubble” and the result of speculation spurred by the popularity of cryptocurrencies and that it will blow quickly.
What about Logan Paul?
A boxer turned Youtuber is known to have sold 2,000 of his cards for several million dollars. Here, it is important to say that for this artwork you do not need to have knowledge of blockchain, but you can market your artwork with relatively little work.
It’s how it happened to him. Initially inspired to invest in crypto, and accumulating quite a fortune in these digital assets, Logan decided to switch to these. His collection can be seen at 0n1 force logan paul.
Last year, he started selling his art and making quite a lot of money on them, too. Those who follow him on Twitter, are now all about this. As for whether his collection is worth investing in, the answer is logical. Of course, it is. The value of the art grows, when purchased by celebrities, which is probably the reason why many of them have decided to start investing. Eminem is also one of the investors.
This time, last year, the owner of Twitter has sold his first tweet as an NFT for almost 3 million dollars. SO, investing in buying Logan Paul’s, definitely seems like a good investment.
Remember when Logan Paul dropped $600K on an NFT? It’s now worth $4,000. That’s a loss of more than 99%. 🤣 pic.twitter.com/NTDUm9RUM8
— Coffeezilla🇺🇦 (@coffeebreak_YT) November 5, 2023
Who and how can create them?
If you’re an experienced artist, with knowledge of creating digital arts, this is also a good opportunity for you to sell your pieces in this form. There are platforms you can utilize to make an NFT, relate it to some other asset, and put it out for sale. The process is not free, though. But compared to what you can make from selling them, a couple of thousand dollars seems like a decent price to invest.
Even though the results of some research conducted in the UK showed that very few people have knowledge of what these are and how they work, this by no chance means investments should be off the plate. One only needs to remember the case with Bitcoin, and how its value grew literally overnight. People who invested first were the ones to get rich the fastest. There were some changes in the value through the years, but those who kept their patience managed to grow their fortune. Keep in mind that the same scenario could follow the NFT market. Who’s to say these celebrity investments are not just an introduction to what we will experience in the future. The whole art world going digital. We all spend most of our daily activities online, anyway, and it seems that we are only going deeper in the digital era.