Millions on NFT Tokens. What is it all about?
NFT tokens have been gaining popularity in the world since February 2021. The amount of the deals may surprise the regulars of the auction houses: a painting for $ 69 million or Twitter post for $ 2.9 million. NFT promises to revolutionize the world of digital art if this format of works is in demand among collectors. What is NFT, as well as how you can make money on the new technology — says Unit Space.
What is NFT
The abbreviation NFT (Non Fungible Token) is decoded as a non-fungible token.
Let’s start with a simple one: a token can be called a kind of certificate of ownership of some kind of digital value. A token is the digital equivalent of something physical. In general, tokens are used in blockchain technology, on which cryptocurrencies, in particular bitcoin, are built. Nevertheless, the crypt is interchangeable. You can exchange one bitcoin for another and still remain with the same as at the beginning.
The uniqueness of NFT lies precisely in its non-fungibility; it cannot be replaced by another NFT token. That is, if you receive such a token (digital code), then it cannot be replaced by something else. Conventionally, this is how to withdraw one hundred dollars from a bank card and then replenish the account with the same amount. In the case of NFT, everything is more complicated: the token cannot be replaced in a way that does not break the system.
Where is NFT used
The most common today are art tokens, game tokens, and smart tokens (for example, domain names). The most trending today are pixel art.
And these are just a few striking examples.
Burning of Banksy painting
The American company Injective Protocol acquired the work of the secret artist Banksy for $ 95 thousand and burned it live. At the same moment, using the blockchain, the painting was turned into an NFT token. This is the first known case of turning a physically existing work of art into a virtual asset, said Mirza Uddin, a spokesman for the buying company Injective Protocol. The company then sold the digital copy at Sotheby’s for $ 380,000.
Selling a Twitter post
Twitter founder Jack Dorsey has auctioned his first NFT tweet. The message with the text “just setting up my tvtr” was bought for $ 2.9 million by the CEO of the Malaysian blockchain service Bridge Oracle.
Every day: First 5000 days
Beeple Digital Collage Every Day: The first 5,000 days auctioned at Christie’s for more than $ 69 million. The painting is a collage of thousands of images that Winkleman has created daily for years.
Rock band Kings of Leon became the first who decided to sell her new album When You See Yourself through NFT tokens: buyers, in addition to tracks, received an exclusive artbook, a vinyl record and the right to attend concerts. The musicians earned about $ 2 million, transferring a quarter of the amount to the coronavirus fund.
Singer Grimes (Elon Musk’s girlfriend) made even more money: $ 5.8 million for a twenty-minute sale of NFT tokens to the drawings she and her brother created.
Such examples exist not only in the field of art. NFT tokens have already begun to enter the real estate industry: American-Ukrainian startup Unstoppable Domains, building blockchain domains, started selling premium domains. In particular, the domain win.crypto was sold for $ 100,000.
Other high-profile deals are expected. For example, mixed fighter Khabib Nurmagomedov announced the release of NFT tokens, which are timed to coincide with the end of a career. Tokens will look like cards of three denominations — gold, platinum, diamond. It is planned to issue 290 gold cards, 29 platinum cards and only one diamond.
Most of these tokens are part of the Ethereum blockchain, and the technology itself was created back in 2017. It is believed that for the first time NFT tokens were implemented in the CryptoKitties game: here you can buy unique cat characters. By purchasing a digital animal, you become its owner and you know that other users will not have the exact same creature.
Blockchain is a kind of account in the form of a chain of blocks, which stores records of transactions made within a database located on many computers at the same time. To put it even more simply, it is a database where information about all coins of a digital currency is stored.
How Blockchain works
Ethereum is a cryptocurrency, but it’s blockchain also supports working with NFTs, and alternatives to NFTs from Ethereum have also appeared.
A key feature that is especially valuable now in the world of “physical” art: the use of the NFT token in the registration of ownership of something. The creation of an NFT token for, for example, a digital image will indicate the original of the work, and the owner of such a token can call himself the owner of an art object with the right to dispose of it: sell, donate, and so on.
Who can make money on NFT??
This opportunity is available to anyone who has a crypto wallet in ETH. Trades can be conducted in any currency, but you can pay for tokens only in ETH. This is necessary not only to buy other people’s works with NFT, but also to turn your potential lots into tokens.
A small fee is charged for every transaction on the Ethereum blockchain. Let’s say artists who want to tokenize their work can do this on the Rarible or OpenSea solutions. There you can also buy your first token tied to the work of another author. It is noteworthy that OpenSea creates an NFT token only when a buyer has already been found for it. This saves the author from additional fees in the form of a commission on the Ethereum network. Rarible, on the other hand, creates an NFT token immediately upon uploading the work and charges a commission from its author.
How much money is in NFT and development prospects
The NonFungible project, estimated the volume of the NFT market in 2020 at $ 250 million, since 2019 it has tripled. The real excitement began in early 2021, and the demand for NFT became even greater: the trading volume of NFT tokens in February 2021 amounted to $ 340 million, which exceeded earnings on all digital auctions over the past year.
NFT tokens are traded on specially created digital marketplaces similar to Etsy or eBay.
Some of the popular Open Sea, Rarible, Zora, Mintbase. More specialized platforms, for example, for the sale of content (Mirror, Audius, EulerBeats), art objects (SuperRare, Async Art, Known Origin, Nifty Gateway and others). Here you can become the owner of a digital version of an image, a music track, a sculpture, a domain name, or a character of your favorite computer game.
Final Words
NFTs can revolutionize copyright control, and transactions with tokens are obviously cheaper, easier and faster than transactions with the real objects to which they are linked. However, it should be noted that the platforms for the creation and sale of NFT tokens have just begun to develop.
Over the past 3 months, Unit Space has implemented 4 large NFT platforms for such areas as: Art, music industry and sports. If you are interested in creating your own NFT Tokens and launching your own platform, then our team will help you! Just contact us here.
We have experience in developing both custom NFT Platforms and platforms based on OpenSource solutions, and The Manifest marked Unit Space as TOP 30 ETHEREUM COMPANIES IN UKRAINE, check.
