NFT: The Rise of Crypto Collectibles
If you find yourself wondering about the hottest thing in the cryptocurrency space known as NFTs, you are not alone. The dawn of digital collectibles is here and cryptocurrency enthusiasts and collectors alike are excited for the possibilities it brings.
NFT or non-fungible token can be described in the simplest terms as a digital work of art made into a unique and verifiable asset on the blockchain. The NFTs are kind of like Bitcoins as they are acquired but have different market values. Having an NFT is like owning a digital asset in which ownership is recorded in the blockchain.
You might be confused about owning a digital copy of something that can be copied by anyone on the Internet. Even if anyone can just download a copy, take a screenshot or print out a piece of digital art, only a few people can actually own the piece. If you buy a NFT, your unique ownership along with its smart contract is now stored on the blockchain. That record is your proof of ownership no one can take away.
Having a NFT is not an entirely new concept. CryptoKitties, a digital game on Ethereum for buying and selling virtual cats, was considered one of the original NFTs. However, the idea just recently became phenomenal because of the growing interest of crypto investors looking to diversify their digital assets.
No two NFTs are the same because they are not mutually interchangeable. They can be compared to limited-edition items and collectibles like shoes, rare coins or even Pokemon cards. NFTs can either be images of physical objects, video game skins, tweets, GIFs, virtual trading cards and all types of digital art.
NFTs that made headlines
Mike Winkelmann, also known as the digital artist Beeple, made history when his NFT was sold at an auction at Christie’s for a whopping $69 million. Beeple’s “Everydays: The First 5000 Days” is a digital collage containing 5,000 futuristic images, is now owned by Vagnesh Sundaresan, founder of the Metapurse project.
In an interview with CNBC, Winkelmann shed more light to what a NFT is all about. He said that when you buy a NFT, you don’t own the copyright to it. You can just display it or show you have ownership of it. It’s like having a physical painting of an artist after buying it. The copyright remains with the creator.
In other words, the NFT buyer does not have the right to sell any of the 5,000 images. Only the creator of the NFT has the right to sell those images. After reaping multi-millions on his first NFT, Beeple auctioned one of the images seen on “Everydays” and sold it for $6 million in Nifty Gateway, a platform for selling digital art.
Beeple revealed he’s “very, very bullish” on the technology and the cryptocurrency space in the long term. He also reminded people to be careful because NFTs are still new and “quite speculative.”
Another mind-boggling NFT sale came from Grimes who sold her digital art of tattooed cherubs holding spears in an apocalypse setting for $6 million. In the music scene, Kings of Leon became the first ever band to have an album up for sale both as NFT and for streaming songs.
The first tweet by Twitter CEO Jack Dorsey was sold for $2.9 million in a bidding war. HIs first official tweet, which said, “just setting up my twitter”, was posted on Twitter on March 21, 2006. The tweet turned NFT contains a digital autograph of Dorsey.
Sina Estavi, CEO of Malaysian blockchain service Bridge Oracle, was the winning bidder on Valuables, a digital platform for trading autographed tweets. He paid for the NFT using Ethereum. Dorsey said that proceeds of the sale will be donated to Give Directly Africa Fund, a charitable organization focused on poverty alleviation.
NFT explained in SNL
The insane amount of money in exchange for NFTs has piqued the interest of both artists and collectors. NFTs are so hot that the popular comedy show Saturday Night Live (SNL) just had a skit explaining the tokens in rap format. In the skit, Kate McKinnon acting as Yellen is seen talking to a group of university students about economics.
When one student asked about NFT, another SNL cast member, Pete Davidson, dressed as Robin, Batman’s sidekick, began rapping like Eminem to explain the meaning of NFT. The Matrix’s Morpheus, portrayed by Chris Redd and Jack Harlow as the janitor joined in the rap skit.
The skit described NFT in simple terms with lyrics like “there can only be one like you and me.” Once it’s minted, you can sell NFT as art.
A 10-second clip of the SNL skit was recently sold as NFT for $365,000. The buyer, who was only known as Dr. Dumpling, is also entitled to two tickers to the live show.
Where to buy and sell NFTs
Although there are many digital marketplaces out there, here are some significant ones below:
Dubbed as the “premier” marketplace for buying and selling NFTs or Nifties, Nifty Gateway is owned by parent company Gemini LLC, the cryptocurrency exchange company owned by billionaire twins, the Winklevoss brothers. The team running Nifty Gateway curates the music and artwork to be traded on the website. Beeple’s digital collage was sold on this platform for over $69 million. The platform boasts of its exclusivity as it handpicks only the best in the industry. It is the recommended marketplace for NFT collectors looking for a good investment.
A number of accounts on Nifty Gateway were hacked recently. Artwork worth thousands were reportedly stolen. However, the company explained that hacked users were not using the two-factor authentication to protect their accounts.
OpenSea is the biggest digital marketplace for cryptocurrency-based collectibles and NFTs. The team behind the platform believes open and liquid marketplaces will help support this new digital economy. OpenSea has raised $23 million to power its growth alongside the increasing number of creators and artists who want in on the exploding NFT market. Anyone can create a NFT and trade it on the platform.
The world of NFTs has certainly moved beyond CryptoKitties. Some NFTs that can be found on the platform include digital art, memes and even virtual parcels of land. Users can buy NFTs with RARI, the cryptocurrency of Rarible. Owning RARI tokens allows users to help moderate creators, vote on proposals about the platform and select featured artwork.
NBA Top Shot
If you want to acquire a NFT, you can find them in online marketplaces like Nifty Gateway, OpenSea, Rarible and SuperRare among others. If you are a NBA fan and want to buy highlight collectibles, take a look at NBA Top Shot. Transactions in that platform have reached about $230 million just by trading top NBA “moments.”
NBA Top Shot is a partnership between the NBA and blockchain company Dapper Labs. It has become a popular online platform for buying and selling virtual basketball cards. NBA fans can purchase their favorite player’s moments from recent basketball seasons. These moments are encrypted in a digital record book, making them unique and impossible to duplicate.
These virtual trading cards can be bought directly from the site or in the marketplace where people can swap with others for cash. The marketplace has become highly competitive as buyers hope to flip their virtual cards for a huge profit.
Another platform where you can buy and sell NFTs is Ecomi. It is a Singapore-based company offering a one-stop-shop for digital collectibles using the VeVe app. The app-based marketplace aims to provide users with a platform to acquire any type of collectible. Ecomi offers protection of digital assets and opportunities for intellectual property owners to generate revenues. The platform offers a safe space where the pop culture and digital collectibles industry will thrive.
Terra Virtua, a blockchain-powered virtual reality entertainment company, allows its users to step away from reality and enter a whole new world of collecting NFTs. Users can build their own personal lounge to display their collections for others to see. In 2019, Terra Virtua became the showplace for items from popular movies like The Godfather and TopGun.
Aside from creating a platform for digital collectibles, the company also launched its own cryptocurrency known as Terra Virtua Kolect (TVK). The digital currency can be used to buy collectibles. Users can also reduce their transaction fees on the platform if they use the token. If users amass a certain amount of TVK, they will be granted special privileges like early access to select new releases, meet artists and creators plus monthly NFTs and TVK drops.
Terra Virtua’s latest collaboration with Legendary Entertainment features collectibles from the movie Godzilla Vs. Kong. The NFT release is a series of 3D models of the characters in the movie.
NFTs are here to stay
Artists and creators may be drawn to NFTs because of the ability to program royalties. This means creators can set a portion or percentage of future NFT sales and that amount will be automatically issued using tokens. Digital marketplaces with NFTs like Rarible can be designed to collect immediate royalties unlike the traditional content platforms.
How NFTs affect a work’s intellectual property may not be seen as fully developed for now. However, it has the greatest potential to provide creators more control over their work like tracking and collecting royalties at a faster pace.
The NFT craze in the crypto world may be here to stay. Investors who spend millions on NFT marketplaces hope their unique collectibles will have higher value in the future. Others may be buying NFTs for publicity, bragging rights or maybe just to join a growing community.
Whatever the reason, it’s widely concluded that NFTs, just like cryptocurrencies, are digital assets worth holding on to. Like any other investment, there’s always a risk the hype surrounding NFTs would die down. But for now, investors and artists are enjoying the financial rewards of NFTs.
Reissa covers latest news for Revolution Crypto.