An NFT (non-fungible token) is a certificate that confirms ownership of a digital asset. It is stored in the perpetual IPFS vault of a blockchain in the form of a unique cryptographic code, a digital signature that is almost impossible to forge. NFTs are bought and sold online.
What can become an NFT
Generally, non-exchangeable tokens certify ownership of the following digitised objects:
- Objects of graphic and other types of art. A collage of images, Everydays: The First 5000 Days, by American artist Mike Winkelmann, was sold for $69.34 million at a starting price of $100.
- GIFs, animation.
- Video. A 20-second video clip of legendary American basketball player LeBron James’ “Cosmic Dunk #29” was purchased for $208,000.
- Virtual avatars, game characters and skins in the metaverse.
- Musical works.
- Social media posts. Jack Dorsey, CEO of Twitter, auctioned off the NFT of his first tweet for $2.9 million.
The NFT market shows strong growth
DappRadar reports that global NFT sales reached $24.9 billion in 2021. Compared to the previous year (when it was $100 million), the market for non-exchangeable virtual coins has shown more than 200-fold growth. The market capitalisation of the top 100 valuable NFTs has collectively crossed the $16.7 billion mark. According to Chainalysis analysts, the total volume of transactions in the NFT market during its existence has reached about $27 billion.
How is NFT different from fiat and cryptocurrency?
Fiat money and cryptocurrencies can be exchanged for each other with a certain equivalent. This is why they can be called “fungible”. One dollar is always equivalent to another dollar, just as a bitcoin is equivalent to another bitcoin. NFTs, however, are unique. Each token has an original digital signature. That is what makes NFTs one-of-a-kind. And that is why they are called “non-fungible”.
Where to sell or buy NFTs
Some of the most popular exchanges at the moment are OpenSea, Axie Marketplace, SuperRare, Rarible, Nifty Gatewa, Decentraland, Solanart, Binance NFT and Foundation. Some of these exchanges only accept cryptocurrency, but most of them allow you to pay with a bank card.
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What you need to do to sell your NFT
- Register an account at a specialized marketplace and create a wallet.
- Buy the cryptocurrency that the marketplace works with. You will need to pay a gas fee (commission for the representation of your item on the platform). Typically, it ranges from 2.5-15% of the declared NFT price.
- Upload an object for sale and describe it. Next, the systеm commission will be charged and the token will be put up for auction.
NFT and copyright
This type of token does not conflict with copyright law. It only confirms ownership, not authorship. After all, if you buy a painting at an exhibition, the copyright remains with the artist.
What do analysts say?
Some analysts see NFT as a bubble that has inflated on a hype and is about to burst. Others are of the opinion that NFT will dramatically redistribute global crypto-asset investment flows and continue its development.
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