Why NFTs are booming in 2021?
NFT stands for Non-fungible token. Before understanding what is an NFT, it is important to understand what the term “Fungible” means.
An asset or token is "Fungible" if it is interchangeable with another similar unit of same value.
A good example is the money we have in our wallets.
Although there are a lot of 50 EUR notes in circulation, it does not matter which one you get as they all have the same value.
The same goes for cryptocurrency. One Bitcoin is not any different from another.
NFTs are the opposite to “Fungible”. These set of assets are not interchangeable as they are unique in their own way.
Non-fungible assets include football tickets, arts, statues and digital art which are traded in real-life and on marketplaces on the web.
What type of NFTs are booming?
Back in 2012 unique digital artwork was invented which was tied to crypto tokens. This led to the creation of a new set of non-fungible tokens.
A set of blockchain building blocks that allow developers to create their own NFTs.
NFTs are commonly created by uploading files, such as digital artwork, to an auction market.
A copy of the files is created which is then recorded as an NFT on the digital ledger. These NFTs can be bought with cryptocurrency and resold.
Although these type of NFTs have been around for years, it was only this year that got the public attention.
Cryptocurrency enthusiasts and investors around the world got intrigued by this new generation of NFTs lately and the hype around them grew exponentially.
In fact, the sales recorded in February 2021 were 30 times more than the previous months.
Another NFT which went viral was the sale of a piece of digital artwork by Mike Winkelmann, known as Beeple, sold for nearly $70 million last week.
This might sound crazy, and it is.
The first thought that passed through my mind was
"Why I should buy a digital artwork when I can just copy, paste it or download it on the drive?"
The reason is that although anyone can copy it and have a similar artwork they will never own the original.
I can hire the best sculpture on earth to create a perfect replica of Davide (Michelangelo). He can do the same exact copy, but it will remain a replica and it will never be the original. This will also be reflected in the price.
The exact concept in NFTs.
Original - Millions $$
Replica - Few thousand $
Which are the most famous NFTs to buy?
With a starting price of 9 Ether which is approximately $15k. Crypo Punks are the most expensive NFTs due to their limited supply of 10,000.
Beeples are created by the same artist that sold his artwork for $69 million recently. All his artwork is gaining traction as investors are speculating that Beeples will be the Picasso of NFT.
The cost of Hashmasks is much lower, they start from the price of 1 ETH and depending on how rare their traits are, their price is determined.
There is a total supply of 16,384 and considering their limited supply the price of 1 ETH is a very reasonable price.
Their is a much wide variety of NFTs available, which can be found on NFTs marketplaces.
Where to buy NFTs?
NFTs are purchased with cryptocurrency on marketplaces. You can browse these NFTs and buy your favorite in a few minutes from Open Sea marketplace.
Personally, I am still skeptical about NFTs and their actual value, but I also know that today’s society values digital goods more than physical one.
Society is fully digitized, and I am pretty sure that the art world is moving into NFTs, with wider interest in the foreseeable future.
It is estimated that by the end of 2021 this market would have exceeded $1.2 billion.
Your still unsure?
Huge interest is also evident when looking at the number of visitors on OpenSea NFT marketplace. It jumped from 770k visitors in January 21 to 2.8 M in February 2021.
These forecasts makes the purchase of NFTs tempting as the purchase of NFTs at these early stages might turn out to be a massive opportunity in the near future.
If you are just curious or interested to explore more these artworks. Open an account with Open Sea, download MetaMask* plugin and you will be ready to go.
Are you joining the NFT MANIA?
*MetaMask is a wallet installed on your computer where you can store your cryptocurrency safely in a decentralized manner. It has to be topped up in Ethereum and used on decentralized platforms.