On social media, Two words are used like hotcakes right now, NFT and Web 3.0. NFT is a short abbreviation of Non-Fungible Tokens. It is so famous that Collins Dictionary has declared it as a ‘Word Of The Year- 2021’. The thing about NFT is that many people in India try to talk about it but very few understand it. And, as it is an investment, it is better to have a complete understanding of it.
What is NFT?
Non Fungible Tokens are digital assets on blockchain networks. It can be as simple as a video, a song, a tweet, or a picture of a famous personality, say for example of Ranveer Singh which is rare and most importantly original. In NFT, these digital assets are authenticated on Cryptocurrency blockchain mainly Ethereum(digital currency like Bitcoin).
The Process-
To make content a digital asset, a simple process of logging it on blockchain is done so that every transaction of the sale is recorded on a chain, which creates a ledger that anyone on the network can access, making it easy for digital creators to earn money. It provides a buyer with a list of all the transactions.
How does NFT work?
Creators of digital assets can sell their work on different NFT marketplaces like Nifty Gateway, Foundation, Opensea (where people purchase digital land, apartments), SuperRare and many more.
After purchasing a digital asset they can stake their assets- which works like taking a gold loan from Muthoot Finance or Manappuram Finance and earning money through them.
Artists who have made it Big on NFTs-
Pak’s ‘The Merge’ which was bought by almost 30,000 collectors for $91.8m is the most expensive NFT till date.
Digital artist Mike Winklemann who is known as Beeple sold his art piece called ‘Everydays: The First 5000 Days’ for $69 million.
Larva Labs’s Cryptopunks which are simply a series of 8-bit digital characters is another popular digital asset. Cryptopunk 7523 was sold for $11.75 million. Cryptopunk 4156 was sold for $10.35 million.
Xcopy’s ‘Right-click and save As guy’ was sold for $7.09 million.
Nyla Hayes is a 12-year-old artist who has already earned over $5.7 million in Ether cryptocurrency with her artworks. She recently created Time magazine’s portrait for their ‘100 Women of the Year’ story as their Artist in Residence.
Note of caution-
*Many people call it a Ponzi scheme as there is no clarity available.
*There is no data that shows how it has helped artists.
