NFTs Explained || Why are people investing in it ?
Can you imagine that a single tweet can be sold for more than $2.5 Millions ?, the GIFs you use in daily life have market price in millions of dollars ?
Don’t be surprised, it’s TRUE.
I think most of us know about Jack Dorsey, Co-founder of Twitter and Square. Recently his first tweet was sold for over $2.5 Millions. Let me show you this tweet.
Just five words, published by Dorsey in 2006 and it was sold for over $2.5 Millions. Sound weird ? Yes, But who in the world are buying these tweets and the most important question is WHY ?
We’ll back to this tweet after some time, First let me explain you something interesting and time demanding, that is NFTs or Non Fungible Tokens. So, what are NFTs ? Before explain about it, let me clear you what is fungibility ? Fungible things are those things with units, that can be readily interchanged- like money. For example, You can exchange 10, 1 dollar note with 1, 10 dollar note and still the value of your money remains the same. But in the case of Non-fungible, it isn’t valid. Each non-fungible things are unique and can’t be easily substituted for something similar. Let’s apply this things in NFTs, NFTs are Non-Fungible Tokens in digital form. It can be Arts, GIFs, Videos, Music, Collectibles and even Virtual Avatars and there are only one original copy in the world.
So, Simply understand that NFTs are cryptographic tokens but unlike cryptocurrencies, they are not mutually interchangeable. Since NFTs are non-fungibles, it’s impossible to interchange it, it has it’s unique properties. So, It cannot be interchange with something else.
Most of the NFTs are part of ethereum blockchain. The entire transactions are recorded in blockchain ledger. So, it is impossible for someone to claim the copyright or ownership of it, only the owner have it’s copyright. Despite created in 2014 by Kevin mcCoy and Anil Pash, It’s popularity and usability become popular at the end of 2020. Just like cryptocurrencies, NFTs market continues to spike, as the speculative market for NFTs has led more investors to trade at greater volumes and rates.
YOU CAN EASILY DOWNLOAD NFTs FOR FREE BUT WHY ARE PEOPLE PAYING MILLIONS OF DOLLARS FOR THESE ?
Yes, You can download or Copy the NFTs copies as many times you want for free but there is something NFTs are designed to give you, that cannot be copied- Ownership of the work.
For your understanding, let’s put this in terms of physical art collections. take an example of world famous painting MONALISA . There is only one original painting in the world, but you also have Monalisa in frame in your house or even you can find this in notebook cover, right ?
But can you say that the Monalisa painting is owned by you just because you have this painting in your house ? Although it may have multiple copies but there is only one original in the world. Just like this manner, NFTs work. You can download NFTs for free but you cannot own it.
WHY ARE INVESTORS INVESTING MILLIONS OF DOLLARS ON THESE THINGS WHICH ARE EVEN INTANGIBLE ?
Everyone have heard about cryptocurrencies, right ? You cannot even touch it or it doesn’t have physical existence. But take an example of Bitcoin, a Bitcoin costs $60,000 at the time I’m writing this post.
NFTs are like crypto arts. Nowadays, the world is fastly changing into digital. NFTs are also accelerating a large trend of digital economic innovation as the public is increasingly favoring a crypto economy. It’s popularity is increasing day by day. As of 2018, it’s market cap is $41 Millions but at the end of 2020, it’s over $340 Millions and they’re becoming more popular in 2021 too.
Many investors are willing to pay high rates to secure and promote NFTs and continue to do so because they anticipate NFTs to be the biggest and most profitable collections in the future. Many investors have already began to promote NFTs, from Elon Musk to Gary Vee, and from YouTuber Pual Logan to investor Mark Cuban. Even Mark have already begun to purpose new ways of implementing NFTs technology to monetize sports tickets and merchandise sales.
As NFTs are completely non-fungible and unique, investors invest and collect them, and hope that value goes up one day and they can sell it for a profit.
SOME EXPENSIVE EXAMPLES OF NFTs SOLD
The Digital art named “Everyday-the first 500 days” by Beeple had sold at $69.3 Millions in 2021, which is the expensive NFTs ever sold.
Another Beeple art ‘Crossroad’, which is a 10 sec video showing animated pedestrian walking past of figure Donald Trump sold for $6.6 Millions.
Not only these NFTs can represent collectibles card collections but in digital form. In Feb 2021, a LeBron James slam dunk NFT card on NBA top shot platform sold for $208,000.
These NFTs can be sold in popular NFTs markets like opensea.in, Rarible, Cryptopunks, Foundation etc.
LET’S BACK TO OUR FIRST TWEET OF JACK DORSEY
To be honest, nobody can predict the future of NFTs, but anyway leave that. As promised, let’s back to our first example of Jack Dorsey’s tweet. It was also sold as an NFTs. But here is the amazing thing, the post will still publicly available on Twitter even after it had been auctioned off. Huh, is it seems confusing ?
Then What will buyer Get ?
Talking about this, the buyer will receive a certificate, digitally signed by Mr. Dorsey, as well as the metadata of the original tweet. The data will include information such as the time the tweet was posted and it’s text contents. So, what we learned is, tweets are also the latest digital assets to be monetize through, so called Non-Fungible Tokens or NFTs.
MY OPINION ON NFTs (IS IT JUST A BUBBLE ?)
Is it just a bubble ? To be honest, I don’t know. Just like cryptocurrencies, it also have potential to dominate the world, as the whole economy is slightly shifting to crypto-economy. BUT, take a minute and think , Isn’t the idea of buying something which isn’t there, just strange ? NFTs worth money, it certainly do, but aren’t they hypes at this time ? NFTs are risky because their future is uncertain. We don’t have a lot of history to judge their performance. Take your time, learn about this and then decide whether to invest or not.!!
Thank you for reading !