What is an NFT (Non-fungible token) and why is it revolutionizing the world of collectors, we will tell you.
Its technology is behind the digital artwork auctioned Thursday for $69.3 million at Christie’s or the sale of Jack Dorsey’s first tweet: Collectors are taking over the “NFT”, inviolable digital objects, which promise to be a revolution for the art market.
Here are some benchmarks to better understand the concept of “NFTs” and what they are revolutionary in.
What is an NFT (Non-fungible token)?
The non-fungible token (NFT), a non-fungible piece, is a virtual object, be it a drawing, an animation, a piece of music, a photo, a video excerpt, to which a certificate of authenticity is associated.
This document is included in an inventory called “blockchain“, considered inviolable. The virtual object, which is actually a computer file, can be exchanged or resold, with its certificate.
What does the NFT change?
Until now, and despite the omnipresence of the internet, the sale or exchange of digital files as collectibles was limited to a certain niche market.
Almost all collectors preferred physical objects, paintings, sculptures, bottles of wine or sneakers. In addition to custom, one of the obstacles to the development of the digital art market was the fear of copying. With the “NFT”, copies are still possible, but only a file will have a certificate of authenticity, which cannot be replicated.
Can I create an NFT?
Any Internet user can create an “NFT”.
How to create an NFT?
To do so, you have to go through one of the specialized platforms, such as Rarible or OpenSea, where you can download the file that will become an “NFT”.
To perform the operation, a fee must be paid, often less than $30 per file. This fee will be paid in cryptocurrencies, most often Ether, one of the most widely used, next to Bitcoin.
Once on the platform, the creator of the “NFT” will be able to sell it. And also you can establish, in advance, the percentage you will receive on all possible resales of this file by other Internet users.
What does the NFT market represent today?
In view of the most recent transactions, it already represents several billions of dollars.
On Thursday, the digital artwork “Everydays: the First 5,000 Days” was sold for $69.3 million by Christie’s.
The other major auction houses are actively considering setting up their own “NFT” sale, according to a source close to one of them.
On Thursday, two images created on the CryptoPunks platform sold for $7.3 million each. And Twitter founder Jack Dorsey was offered $2.5 million for the “NFT” in his first tweet.
Is there an NFT bubble?
According to some observers the selling prices of “NFTs” may vary as this universe takes shape, but no one foresees the new market collapsing.
Many even believe that there are NFTs whose selling price is undervalued because the market is still young.
For the buyer of “Everydays”, who hides behind the pseudonym Metakovan, the work sold on Thursday “is worth a billion dollars.”
“My prediction is that over the years, the consensus on digital objects will shift from ‘this material is not even real and is worth nothing’ to ‘is the best way to verify ownership, rarity and authenticity'” Investor Jonathan Bales wrote in early January in what has been considered the reference text on the subject.
“I am convinced that ‘NFTs’ are the future of collecting,” he concluded. “The most exciting part is that the party is just getting started.”