What is NFT?
NFT are the three initials of Non-Fungible Token, which translates to the non-fungible token. That does not necessarily make things any clearer. This is why we must detail the notion of “non-fungible”.
For example, Bitcoins (BTC) or €100 bills are fungible — you know this if you register an Exness personal area and trading account. Even though each note is unique, it will have exactly the same value as another €100 note. The first Bitcoin (BTC) mining, no matter what platform it is on or who owns it, has the same value as a recently mined Bitcoin (BTC) stored in another wallet.
Conversely, works of art or concert tickets are non-fungible. Something that is not fungible cannot be replaced or divided. It is unique. They are objects of the same nature, but which have their own characteristics and their own usefulness. So, let us show you how to become an Exness social trading investor!
We talk about “tokens” when they are digital units, which are exchanged with blockchain technology: 3D visuals, objects in a video game, or even a piece of land in a fictional universe.
NFT Market in 2022
It, therefore, seems that the NFT market is catching its breath after its spectacular surge last year. A year ago, in the first quarter of 2021, qualified NFT exchanges weighed barely $550 million for 470,000 sales and 93,000 active wallets.
The market is therefore still growing very strongly over one year, whether in terms of the total amount of trade (+1318%), number of sales (+1483%), or number of active wallets (+1463%).
Moreover, the volumes on the secondary market (the second-hand market, once the NFTs have already been sold for the first time, for example) are more and more important than on the primary market (when the NFTs are created and sold for the first time).
It is possible to estimate that the NFT market should weigh 100 billion dollars this year. On the other hand, the flip side of this democratization of NFTs is that we will see more and more hacks in NFTs this year.
CryptoPunks
On a similar operation to the Bored Ape Yacht Club (BAYC) collection, CryptoPunks are among the very first NFT projects. The development studio LarvaLabs, therefore, created these 10,000 pixel figures, representing “punks” with random appearance (gender, face, hair, and eyes generated at random).
Today, the smallest CryptoPunk is worth no less than €100,000. The most coveted trade for several million. Visa, the payment giant, has also announced that it has acquired CryptoPunk n#7610 for its collection of NFTs.
Their only practical use? Be part of the “club” of proud owners of a CryptoPunk.3
Is Beeple the greatest digital artist in NFTs?
Beeple, whose real name is Mike Winkelmann, shook the art world last February when the record sale of the digital work Everydays: The First 5,000 Days, sold for 69 million dollars, thus becoming one of the most living artists market quoted.
Beeple is back. After hitting the big time with Everydays: The First 5,000 Days, in a historic sale at Christie’s that sparked international fervor for the world of NFTs and crypto-art, Beeple has unveiled a new creation that will be auctioned on November 9. This is already estimated at 15 million dollars.
Paradoxically, this work entitled Human One marks Beeple’s first foray into the “real” world – if this word still has any meaning today – since this sculpture, which evolves over time, combines physical and digital properties. This 2.13-meter high installation is made up of four ultra-high-resolution LED screens, representing an astronaut in an infinite race, in dystopian settings that can be transformed at will, as the structure turns on itself.
The rendering of the work is generated randomly, from video clips stored on the blockchain which, put end to end, produce a total of 24 hours of images without interruption. Despite its physical dimension, the work is therefore deeply rooted in the NFT technology for which Beeple has become known to the general public.
Pak’s ‘The Merge’
Anonymous artist Pak put ‘mass units’ up for sale on Nifty Gateway for 48 hours. The final work, titled The Merge, is made up of 266,445 “units” that can be resold separately and instantly on the blockchain.
From now on, the unknown factor is no longer the selling price (fixed in advance) but the number of units purchased. So Pak and Nifty Gateway had developed a whole strategy to boost demand during the 48 hours of the sale:
- The initial price of $299 for loyal Pak collectors and $400 for new entrants
- Price incremented by $25 every six hours
- For 10 units purchased, an eleventh is offered; for 1,000 units purchased, 300 are offered
- A continuous ranking of the best buyers (under a pseudonym)
- The Alpha Mass work offered to the largest buyer.
Only Pak’s approach is the opposite, insofar as the work The Merge did not yet exist at the time of the sale. No one knew what she was going to look like. It is by buying a part of this unknown that each collector contributes to it. Encouraged by a low starting price but also to acquire the greatest number of units to receive a rewarding work, The Merge is a game that brings together technology enthusiasts, followers of cryptocurrencies, and NFTs as well as amateurs increasingly fascinated by this universe.
Conclusion
A non-fungible token is cryptographic data representing ownership of a digital object. The object represented can be a photo, a video, an object, a digitized drawing, a digital file, or even a sound.
This object, authenticated and validated using blockchain security protocols, can be bought and sold. On the other hand, NFTs cannot be copied, since they are unique by definition. They attest to a form of digital scarcity and guarantee the ownership of an intangible asset. Their value, determined by the law of supply and demand, is not regulated by any authority.