What Are NFTs and Why Some Are Worth Millions

NFTs have been around for a while and are becoming hugely popular. They first surfaced around November of 2017. Since then, they have collected approximately $170 million. If you are a tech savvy person and have knowledge about the global tech segment, you would know that NFTs have just started. In fact, the $174 million is just the start. For those of you who did not know, this new technology is used to sell and buy collectibles and games. Not to mention that it is revolutionizing the way an artist can sell his creation. NFT is making sure that collectors get access to verifiable collectibles. It can be said that despite the excitement surrounding it, this technology has a long way to go.

You may be wondering what this technology is and how it works? How can users buy or sell using this technology, and how much is it worth? Is it even ethical to use such technology for selling and buying? 

Definition of NFT

In essence, NFT is the acronym of Non-Fungible Token. These tokens are safe, valuable, and can be transferred with ease. You can think of it as how cryptocurrency works, but it has marginal differences. The most significant difference between NFT and cryptocurrency is that the former is unique and safe as it is nearly impossible to replicate, which is not the case with cryptocurrency.  

Technically, one can call NFTs files in digital format. They are very much like your visual media, such as images and video files. In NFT’s case, the user can actually own one or more of these files. There is the safety of blockchain at play here, as your NFT files will only belong to you until you decide to sell them. Every file has its own smart contract, which serves as the evidence of ownership of that person. Another way of tracing the ownership of an NFT file is by tracing its history to its current owner all the way back to the person who created the file for the first time. All this will only take a few seconds. 

As NFTs are pushing the limits of technology, they are making digital art challenge physical art pieces like never before. In hindsight, this means that a completely new marketplace will exist where customers will buy and sell their digital collectibles. Think of it as the groundbreaking stuff that was once thought impossible. What NFTs hold for the future will blow your mind. 

Selling and buying NFTs

Even at this early stage, you can sell, trade, and buy your NFTs at certain places. NFTs can be traded at Nifty Gateway, MakersPlace, SuperRare, Open Sea, Decentraland, and Raible. You can take your NFTs to any of these places and purchase your own NFTs or trade yours with another user and buy yourself new ones.

Since the concept of NFT is similar to cryptocurrency, traders can buy or sell NFTs at will. These markets act on a similar principle to cryptocurrency platforms. You can sign up, pick your NFT, and keep it to yourself. NFT is a type of actual wealth that you can save for yourself for as long as you want. Follow the procedure if you are going to buy or sell the NFTs. Some holders wish to sell their NFTs, so if you have this in mind, you need to notify the community that you want to sell yours to someone interested in the community. One of the top pros of selling NFTs is that you can sell those to anyone interested.

Now, those of you who create content can sell your NFT as well. It is simple, and you can do it with ease. Just upload your art piece set its parameters, and pay a small transaction fee that will cover the cost of transforming the image into digital format, and your pic will turn into an NFT. The simplicity of the process has all content creators in the industry excited, as they are confident about the future of this industry and technology.

How Much Are NFTs Worth?

It works on the same principle as the art market. The price and value of each NFT are relative to its demand. It is possible to make money by selling the NFT. There are no boundaries for selling and buying as long as there are collectors in the community willing to spend money on it. There are scattered examples of how sellers have sold their NFTs for a very high price, and collectors willingly paid for it. For instance, the founder of the social media platform Twitter, Jack Dorsey, sold the first tweet he made for $2.9 million.

  • Rob Gronkowski, the Super bowl champion, earned over $1.8 million by selling his tradable and collectible NFT cards
  • The digital artist Mike Winkelmann, who is famous the world over by Alias Beeple, sold his collage for a tremendous cost of $69 million, which made him one of the wealthiest artists in the world ever. 

With such famous transactions happening, it only makes sense to think which way this market will go in years to come. Will it gain more popularity, or will it cool down a little. For now, it is for all to see that NFTs are in great demand and quite profitable.

Is trading NFT Permissible?

The popularity and high value associated with NFTs give rise to two arguments. One is philosophical, while the other is ethical. One might ask, is it permissible to sell and buy NFTs?  One old one and one relatively new one. The reason why these arguments take place is the presence and of counterfeits. Some counterfeits are known to have infiltrated the marketplace of NFTs in droves. Some profiles of questionable value are known to be selling things that do not necessarily belong to them. Ironically, such practices may continue for some time to come until there are no adequate checks and balances in place. 

The other issue comes with the selling, trading, and buying of NFTs due to resource drain. Some in the art community call it the nightmare scenario as it consumes that many resources and time to complete. Keep in mind that minting new art and creating fresh NFTs is a time-consuming process that can consume a lot of computing power.

Plans are in place to switch to new less minting methods for NFTs, but this will likely take some time. For now, these plans remain a paper concept, and nothing concrete has happened.

Conclusion

It is worth noting that NFTs are making a buzz and seem to be gaining momentum. Take the dot-com bubble as an example, and it was evident that more investments will be made on more exciting and cutting-edge technologies in the future. NFTs have created plenty of excitement among many, and if this continues, we might observe the revamping of the current model of this relatively exciting technology shortly. NFTs have caused a potential shift, and more money will flow into the hands of artists. Creators will also get their share out of this. What will be the ecological impact of this sudden surge in the popularity of NFTs, and how will this end? As things look, for now, one can only guess, but something indeed looks exciting with some uncertainty in the air for NFTs.