NFTs, explain: what it is and why it is suddenly worth millions

There’s nothing like an explosion of blockchain news that makes you think, ‘Um … what’s going on here?’ That’s the feeling I had when I read about Grimes getting millions of dollars for NFTs or selling Nyan Cat as one. And by the time we all thought we knew what the deal was, the founder of Twitter offered a signature tweet as an NFT for sale.

You may be wondering: what is an NFT anyway?

After literally hours of reading, I think I know it. I also think I’m going to cry.

Okay, let’s start with the basics. What is an NFT? What does NFT stand for?

Non-fungible sign.

That doesn’t make it any clearer.

Reg, sorry. ‘Non-fungible’ more or less means that it is unique and cannot be replaced by anything else. For example, a bitcoin is flexible – swap one for another bitcoin, and you have exactly the same thing. However, a unique trading card is non-functional. If you swapped it for another card, you have something completely different. You gave up a Squirtle and got a 1909 T206 Honus Wagner StadiumTalk call “the Mona Lisa of baseball tickets.(I take their word for it.)

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, such as bitcoin or dogecoin, but the blockchain also supports these NFTs, which store extra information that makes them work differently than, for example, an ETH currency. It is noteworthy that other blockchains may implement their own versions of NFTs. (Some have it already.)

What is worth picking up at the NFT supermarket?

NFTs can really be anything digital (like drawings, music, your brain is downloaded and turned into an AI), but a lot of the current excitement is to use the technology to sell digital art.

You mean, like, saltines and their ilk, eh?

I don ‘t think anyone can stop you, but that’s not really what I meant. Many of the conversations are about NFTs as an evolution of art collection, only with digital art.

(Note: when we try the ‘buy my good tweets’ rule, we’re trying to think of something so stupid that it will not really be. natural the founder of Twitter will try it only a few days after we post the article.)

Do people really think it will become like an art collection?

I’m sure some people really hope so – like those who paid almost $ 390,000 for an amount 50 seconds video by Grimes or the person for whom $ 6.6 million was paid a video by Beeple. Actually one of the pieces of Beeple is auctioned at Christie, the famou—

Yoink!
Image: Beeple

Sorry, I was right-clicking on the Beeple video and downloading the same file for which the person paid millions of dollars.

Wow, rude. But yes, this is where it is gets a little uncomfortable. You can copy a digital file as many times as you like, including the art included with an NFT.

But NFTs are designed to give you something that cannot be copied: ownership of the work (although the artist can still retain the copyright and reproduction rights, just as with physical artwork). To put it in terms of physical art collection: anyone can buy a Monet print. But only one person can own the original.

No shadow on Beeple, but the video is not really a Monet.

What is your opinion on the $ 3,600 Gucci Ghost?


It was last sold for $ 3,600, but the current owner is asking for $ 16,300.
GIF by Trevor Andrew

If I get a Monet, I can appreciate it as a physical object. With digital art, a copy is literally as good as the original.

But the bend of owning an original Beeple …

What’s the point?

It really depends on whether you are an artist or a buyer.

I’m an artist.

First: I’m proud of you. Way to go. You may be interested in NFTs because it gives you a way to sell jobs for which there is not much market otherwise. If you’ve come up with a great idea for digital stickers, what are you going to do? Sell ​​it in the iMessage App Store? Not at all.

Also, NFTs have a feature that you can activate, which will pay you a percentage every time the NFT is sold or changed owner, to make sure that if your work becomes very popular and has balloons in value, you will see something of the benefit.

I’m a buyer.

One of the obvious benefits of buying art is that you support artists you want financially, and this is true with NFTs (which are much newer than Telegram stickers). When you buy an NFT, you usually also get some basic usage rights, such as being able to post the image online or set your profile photo. Of course, there are bragging rights that you own the art, with a blockchain entry to back it up.

No, I mean I’m a collector.

Oh, okay, yes. NFTs can work like any other speculative asset, where you buy it and hope that its value will one day increase so that you can sell it at a profit. However, I feel dirty talking about it.

So is each NFT unique?

In the boring, technical sense that each NFT is a unique sign on the blockchain. But while it may be like a van Gogh, where there is only one real version, it can also be like a trading card, where there are 50 or hundreds of numbered copies of the same work of art.

Who would pay hundreds of thousands of dollars for what basically amounts to a trading card?

Well, that’s part of what makes NFTs so messy. Some people treat them like the future of art collection (read: as a playground for mega-rich people), and other people treat them like Pokémon cards (where they are accessible to normal people, but also a playground for mega-rich). Speaking of Pokémon cards, Logan Paul has just sold some NFTs related to a million-dollar box of the—

Please stop. I hate where it’s going.

You activated my drop card (which sold for $ 17,000).
Image by Logan Paul

Yes, he sold NFT video clips, which are just clips of a video you can watch on YouTube whenever you want, for up to $ 20,000. He also sold NFTs from a Logan Paul Pokémon card.

Who paid $ 20,000 for a Logan Paul video clip ?!

A fool and their money are soon separatedI think?

It would be hilarious if Logan Paul decided to sell another 50 NFTs of the exact same video.

Linkin Park’s Mike Shinoda (who also sold some NFTs that included a song) actually talked about it. This is quite something someone could do if, in his words, he was on an opportunistic crooked jerk. ‘I’m not saying that Logan Paul is, just that you need to be careful about who you buy from.

Can I purchase this item as an NFT?

No, but technically anything digital can be sold as an NFT. deadmau5 sells digital animated stickers. William Shatner sold it Shatner-themed Trading Cards (one of which was apparently an X-ray of his teeth).

This one I like. Maybe not for $ 700, but …
Image by deadmau5 and Mad Dog Jones

Gross. Could I buy someone’s teeth as an NFT?

Some attempts have been made to link NFTs to real objects, often as a sort of verification method. Nike has patented a method to verifies the authenticity of sneakers using an NFT system, called CryptoKicks. But so far I have not found any teeth, no. I’m scared to watch.

Look? Where to?

There are several marketplaces that have appeared around NFTs that enable people to buy and sell. These include OpenSea, Rarible and Grimes’ choice, Nifty Gateway, but there are many others.

I heard there were kittens involved. Tell me about the kittens.

NFTs really became technically possible when the Ethereum blockchain added support for them as part of a new standard. One of the first uses was of course a game called CryptoKitties with which users could trade and sell virtual kittens. Thanks, internet.

I like kittens.

Not as much as the person who paid more than $ 170,000 for one.

My face if I’m worth $ 170,000.
Image: Cryptokitties.co

Arrrrrggggg!

Same. But in my opinion, the kittens show that one of the most interesting aspects of NFTs (for those of us who do not want to create an art portal of a digital dragon) is how it can be used in games. There is already games with which you can have NFTs as items. One even sells virtual plots as NFTs. There may be opportunities for players to purchase a unique rifle or helmet in the game or whatever as an NFT, which is a flex that most people can actually appreciate.

Can I get a museum robbery to steal NFTs?

This image is not an NFT. Train.
Image: Wallace and Gromit: The Wrong Pants

It depends. Part of the attraction of blockchain is that it keeps a record of every time a transaction takes place, which makes it harder to steal and turn around than, for example, a painting hanging in a museum. That said, cryptocurrencies have been stolen before, so it will depend on how the NFT is stored and how much work a potential victim is willing to put in to get their goods back.

Note: do not steal.

Should I be concerned about digital art that exists over 500 years?

Probably. A bit rotten is a real thing: image quality deteriorates, file formats can no longer be opened, websites go down, people forget the password for their wallets. But physical art in museums is also shockingly fragile.

I want to maximize my blockchain usage. Can I buy NFTs with cryptocurrencies?

Yes. Probably. Many of the markets accept Ethereum. But technically enough, anyone can sell an NFT and they can ask for what currency they want.

Will the dissertation of my Logan Paul NFTs contribute to global warming and the melting of Greenland?

This is definitely something to look out for. Since NFTs use the same blockchain technology as cryptocurrencies, they can also use a lot of electricity per transaction. People work there on mitigation for this issue, which is great, because I do not want to set the world on fire for CryptoKitties, much less Logan Paul.

Can I build an underground artificial cave / bunker to store my NFTs?

Now, like cryptocurrencies, NFTs are stored in digital wallets (though it should be noted that the wallet should be specifically NFT compatible). However, you can always put the wallet on a computer in an underground bunker.

Are you tired of typing ‘NFT’?

Yes.

Updated March 5, 20:07 ET: The news added that Jack Dorsey sold one of his tweets as an NFT because I originally made a joke and can not believe it actually happened.

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