In March 2021, a work by American artist Beeple sold for close to $70 million at Christie’s. This would not be surprising on any other day, except for the fact that this is the first ever sale by a major auction house of art that does not exist in physical form.
Welcome to the world of NFTs, where a piece of artwork, or a plot of land in the metaverse could be selling for up to millions each.
NFT is the acronym for non-fungible token. Non-Fungible Tokens are digital assets that have rattled the crypto arena. Basically these tokens are digital representations of real-world assets such as art, music, videos, and in-game purchases. What makes the token non-fungible is that each token is unique.
NFTs are a new and fascinating phenomenon. Around since 2014, they’re unique digital assets that are bought and sold online using cryptocurrency. One-of-a-kind tokens used to indicate ownership of a particular digital item (often a digital artwork), NFTs are disrupting markets around the globe from art to gaming, from events to insurance.
For collectors, artists, enthusiasts, and speculators, this is the right opportunity. However, the users are torn between the digital asset being a bubble or a future long-term investment opportunity.
Generally, you can participate in NFTs by buying, selling, or creating NFTs.
The virtual assets can be bought via NFT Market places either through an auction or at a specific fixed price. Some of the most common NFT marketplaces include OpenSea, Mintable, Nifty Gateway and Rarible.
You can also sell an NFT to realize profits. You can upload it in the marketplace either via a fixed price or by auction.
Finally, you can create and upload your art or digital asset in the marketplace. Subsequently, you can list it for sale. This is certainly a popular option for artists, be it painters or musicians looking to monetise their creative work.
While some see NFTs as the future of ownership in the online world, buying NFTs as a vote of confidence in the development of “Web3” or the metaverse, others are baffled as to why so much money is being spent on items which do not physically exist.
As of now, to invest or not to invest in NFTs remain a question on many investors’ mind. As with any other investment vehicle, investors should always do their own due diligence and evaluate if the investment is suitable for their risk appetite and investment objective.