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Why Are NFTs Selling For Millions

Following is the Pixelated ape face which you could quite easily screenshot right now, go ahead honestly just do it is apparently worth 1.2 million US dollars that's just one of several bonkers ideas cropping up at a new frontier in the febrile world of crypto finance.

nft ape monkeys

Great fortunes are being made of course but more intriguingly the future of how we all experience art, play games and even share memes is looking ripe for revolutionary change. So join us today as we voyage through the crypto looking glass and ask exactly what are NFTs.

An NFT or non-fungible token is essentially a database record on the Blockchain that refers to a unique specific digital asset. That asset might be a Song or a GIF or as we've seen a pixelated doodle of a chimp in a do rack.

Let's look at NFTs through a slightly more familiar lens, Bitcoin like all Cryptocurrencies derives value from scarcity and the icy mathematical certitude of the Blockchain.

Also Read: What is NFT and why are people crazy about it | NFT the $13B Marketplace explained

Central governments can't mess with it by printing more and the ledger is ironclad secure. NFTs harness that same principle to offer reliable proof of origin and ownership as they pertain to artistic assets.

The non-fungible token isn't a work of art in itself by the way but it is a certification engraved forever on the Blockchain providing priceless proof of provenance and authenticity.

Let's look at some more weird examples,

Like our blocky 8 body back there that, some dude actually paid 1.2 million dollars for just for a giggle then delve into what it all means okay remember Nian cat, the adorable viral Moggy and pop-tart hybrid who sailed out of the stars and into our heart back in those carefree innocent days of 2011.

Creator Chris Torres marked its 10th anniversary with a remastered edition of the classic GIF that just sold via the magic of NFTs for the frankly ludicrous sum of 300 Ethereum coins that's about 590000 in real money or if you like a three-bedroom house in Los Angeles!

“I'm very surprised with the success Torres told Nasdaq reasonably enough but I think I’m most glad knowing that I've basically opened the door to a whole new meme economy.”

It isn't only daft animal pictures making big bucks in this brave new world of NFTs, short video clips of basketball games are also doing a lively trade. One depicting Lebron James dunking on rival Nemanja B Eliza recently changed hands for a whopping 208 thousand dollars.

NBA top shot the brand under which the league sells such moments through NFTs is a bit like that old school hobby for collecting sports cards but with video investors are already splurging over 100 million dollars a week on these moments.

 Jesse Schwartz the high roller behind that 208k Lebron clip purchase makes a point of mentioning this lavish buy in his bio twitter suggesting he did it at least partly for the flex or show-off value.

We really can't emphasize enough that these clips are widely available completely for free on Youtube so the growing popularity of NFTs remember that's the database entry on the Blockchain proving the buyer owns this given dunk or that particular cat meme is arguably a kind of conspicuous consumption akin to Lamborghinis and Hennessy only without any Lamborghinis or Hennessy.

Still there are positives, NBA top shot was created by forward thinking software house dapper labs it works on a revenue-sharing basis with the NBA and the players association. This blueprint is seen as a guide to the future with fans essentially investors now taking on the role of old-school patrons supporting their heroes directly.

Also Read: Top 5 Buy And Hold Cryptocurrencies To Own For Life

Dallas Mavericks owner and celebrity Billionaire Mark Cuban reckons top shot could be one of the NBA's main revenue sources over the next few years and by the way it isn't just spectacular dunks and deft layups doing a roaring trade on NBA top shots one excitable fan just paid one hundred thousand dollars for a clip of New Orleans Pelicans power forward Zion Williamson merely blocking a rival player's shot.

Let's take a moment ourselves to tackle the terminology to truly understand non-fungible tokens.

We probably need to explain what Fungibility is. So here goes fungible goods are made up of discrete individual units each of which are interchangeable and functionally indistinguishable from one another.

Gold is a great example, sweet crude oil is another perhaps the most instructive fungible commodity we all know and love is Cash. If I give you a twenty dollar bill and you hand me back a ten and two fives we're even.

Always those particular bills have no history so even if one of the fives you slipped me was once involved in a shady secondhand car deal or the 10 was lovingly fondled by Timothy Chalamet they hold exactly the same value they possess Fungibility and Fungibility is the basis of their versatility.

A non-fungible token is quite different it can't be broken down, it's unique and that uniqueness is the basis of its value. It can't straightforwardly be swapped or broken down or at least not without diminishing its value like a racehorse say or a Michelangelo nude. It has scarcity and provenance and these qualities add value. Sometimes a hell of a lot of value indeed that bored-looking Pixelated ape who's almost certainly worth more than your house was created more or less as an experimental wheeze in non-fungible tokens by American design studio Lava Lab in 2017. 10000 of these angular faces so-called crypto punks were created by a Lava Labs algorithm. Each was assigned a discrete NFT address on the Ethereum Blockchain then they were given away for free to Ethereum wallet holders.

Flash forward to today and Cryptopunk's inbuilt scarcity limited to a strict run of 10000 plus their iconic status as early adopter crypto icons somehow makes them valuable and to that the Nifty detail that within their ranks are still rarer classes of crypto punk including Ape Zombie and rarest of all alien and hey presto you get a mad secondary marketplace where faces never sell for less than eighteen thousand dollars a piece!

Also Read: Key points to consider before investing in Cryptocurrency

Nowadays the total value of all crypto punk sales since the project began is already reportedly north of 100 million dollars. You're probably wondering what's the point of forking over such vast fortunes for a third-rate monkey mug shot? Fair enough, it is insane but maybe consider this Shiny Rabbit by American irl sculptor Jeff Coons, it sold at auction for 91 million a little over a year ago. The art world has always been a little bit mad an insanely over-inflated posh but nonetheless grotesque exercise in flexing serious old-school auction house Christie's has just sold the NFT representing a work named the first five thousand days by digital artist people for the crowd-pleasing sum of 69 million dollars nice!

The rise of NFTs could well represent a positive paradigm shifter. Artists who like lucky old people will earn royalties from all future re-sales of their work thanks to clever coding embedded in the very NFT itself creating fake scarcity in a world of infinite cost free copying and pasting is a nightmare to get your head around but if it catches on as an idea we may enter a golden age where creators be they digital doodlers or kings of the basketball court get to see their great works appropriately remunerated.

For instance Grimes, Elon Musk's lady friend just made six million dollars auctioning artwork set to music and that's nothing, EDN producer Blau just earned more than 11 million dollars flogging music and Merch using NFTs in one late February weekend alone and sure the ape example is ridiculous that's almost the point of it it's a great work of art partly because it's so dumb but when artists start as many already have creating elaborate 4D creations in the coming madness of the Metaverse things will get properly interesting in alt world decentraland.

For instance one player recently bought up 64 lots of virtual property bundled them up and sold them on for 80000 because of prosaic considerations like location and road access again all in a virtual space through the mechanism of NFTs! Another cached up speculator reportedly shelled out 222000 to buy a section of Monaco racetrack on an Ethereum based formula one racing game. He or she will henceforth receive five percent dividends from all future races and ticket fees.

Also Read: Why Elon Musk Became Twitter's Largest Shareholder & How will it Affect Us?

So NFTs are a way of generating scarcity and proving ownership and history of digital assets on the Blockchain. Clearly some people think they're wise investments and most certainly not just a load of overhyped business.

So what do you think of this whole NFT boom and rise of Blockchain and Metaverse and have you ever thought of investing in one of such NFTs? Do let us know in the comment box below and yes, if you think that this post helped you in understanding the concept of NFT, please share it with your friends as well.

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