The digital area has created new technologies that promote transparency, verifiability, and decentralization. The blockchain is one such emerging technologies that has made it possible to transfer money via an open ledger and prove ownership of digital assets. Some of these assets can be pieces of art, text messages, or simple GIFs. This has become possible thanks to the NFT boom, which gives artists a new method to promote and sell their creations.
What Is An NFT?
An NFT is an abbreviation that stands for a Non-Fungible Token. To answer the question of what is an NFT, we need to know what fungible and fungibility are. A fungible item can be exchanged for another object of the same type and still preserve the same value. A good example is the US Dollar. A $10 bill can be swapped for another $10 bill or two $5 notes, and neither of the two parties involved in the exchange would lose any value. The same rule can be applied to cryptocurrencies, such as bitcoin. A bitcoin bought on an exchange or one sent to you by a friend is worth precisely the same.
Non-fungible items are the exact opposite. They can’t be exchanged for other items, and they don’t hold the same value as the assets they are supposed to substitute. An original piece of art by a famous painter is non-fungible because there is only one in existence. A digital character from a video game and a parcel of digital land are other examples of assets that are unique and non-interchangeable.
NFTs are tokens stored and distributed over networks such as Ethereum, EOS, Tron, and several others. The most popular standards today are Ethereum ERC-721 and ERC-1155. This asset class is publicly available, but the property rights are owned by a party whose ownership can be proven via the blockchain. That means that everyone can download a digital copy of an NFT, but only one person owns that particular piece. Various items can be digitalized in the form of an NFT: artworks, land, collectibles, skins and in-game characters, popular texts and quotes, etc.
Main Characteristics of NFTs
Each NFT has its own unique characteristics saved in the underlying smart contract. The digital data of an NFT can’t be reproduced in a different asset. NFTs are scarce and have limited quantities. In some cases, there is only one copy. In others, like with collectible basketball cards, a set can consist of multiple unique items. Each individual piece can be tracked and verified via the blockchain. Unlike cryptocurrencies, which are divisible in smaller denominations, an NFT can’t be split in fractions of a token. The blockchain makes it possible to swiftly transfer ownership to someone else and prevent theft through the security of private keys.
The earliest example of a successful use case for an NFT was the video game CryptoKitties. It allowed players to breed, upgrade, and sell virtual cats over the Ethereum blockchain. Each cat was distinguishable from the others and had its own unique digital characteristics.
Recent developments in this industry have allowed us to combine both fungible and non-fungible tokens through the same smart contract on Ethereum. This is the ERC-1155 token standard developed by the game developers from Enjin. Some games allow players to collect both fungible and non-fungible items. Unique characters, skins, weapons, or pieces of land can be combined with in-game currency and gold, for example.
Use Cases and Platforms for NFTs
After CryptoKitties, we have seen a bunch of other popular NFT games:
Decentraland
GODS Unchained
Sorare
Axie Infinity
F1 Delta Time
To find out how to buy NFT, you can visit a popular site and NFT marketplace for digital artworks, such as:
OpenSea
Rarible
Nifty Gateway
SuperRare
What are the Benefits of NFTs?
NFTs have opened up new markets to buy and sell digital items that would otherwise not exist. Where else could you sell a colorful GIF, tweet, or a sticker if you wanted to? Art collectors don’t have to buy paintings, but they do it to become the sole owners and support the artists or the movement. Don’t forget the speculative nature of the cryptocurrency sphere. Investors can purchase NFTs hoping that their value will increase, so they can profit on a future sale.
Speaking of value, let’s take a look at the Top 10 most expensive NFTs ever sold.
Top 10 Most Expensive NFTs
#1. Everydays: The First 5000 Days
Sold on 11 March 2021 for $69.3 Million
This artwork is the most expensive NFT sold by the auction house Christie’s. It presents a collection of 5000 pieces created by digital artist Mike “Beeple” Winkelmann. Beeple worked on his art portfolio since 2007 and never missed a day in which he wasn’t creating. His digital collection shows the artist’s evolution as a painter throughout the years. This NFT was purchased by Vignesh “Metakovan” Sundaresan.
#2. CryptoPunk 3100
Sold on 11 March 2021 for $7.58 Million
Matt Hall and John Watkinson founded Larva Labs in 2007. It’s a software company that created 10.000 weird-looking digital characters, which were turned into non-fungible tokens. They became popular as CryptoPunks. Some of them were given away for free, but others were auctioned off for several million dollars.
CryptoPunk 3100 is part of a rare set of 9 alien punks. His skin is blue and green, and he wears a white and blue headband. The bidding war for this particular NFT crypto item started at just $76 in June 2017 before it was lastly sold for over $7.5 million.
#3. CryptoPunk 7804
Sold on 11 March 2021 for $7.57 Million
Another CryptoPunk took the podium and occupied third place in the race for the most expensive NFT sold globally. CryptoPunk #7804 is also an alien punk created by Dylan Field. This unique character has three recognizable features: a pair of black sunglasses, a dark cap, and a tobacco pipe with smoke coming out of it. It was first sold in January 2018 for almost $15.000 before someone bought it a 2nd time for a seven-digit figure.
#4. Crossroads
Sold on 25 February 2021 for $6.66 Million
Crossroads is another piece of NFT crypto artwork drawn by Mike Winkelmann, better known as Beeple. It’s a 10 seconds long video clip that depicts a Donald Trump-like figure lying naked on the ground. The character is a giant compared to the people who pass him by, not even looking in his direction. Curse words and profanity are written across his naked body.
A blue-colored bird lands on his shoulder. It looks like Larry T Bird, the logo bird of Twitter. Before it flies away, viewers can see a speech bubble depicting a clown. It’s interesting to note that if Trump had won the elections, the NFT would have shown him wearing a crown and running through flames. The piece was sold on the Nifty Gateway NFT marketplace, and the buyer remains anonymous.
#5. Jack Dorsey’s First Tweet
Sold on 22 March 2021 for $2.91 Million
Jack Dorsey is one of the founders and the CEO of Twitter. In 2006, he wrote a short tweet saying: “just setting up my twttr”. This is the first tweet ever written on the platform. This piece of text became an NFT and was placed on auction on the Valuables NFT marketplace. After a few months, it was purchased by Sina Estav, the CEO of a Tron-based Oracle System. The entire sum was later donated to charity programs in Africa.
#6. CryptoPunk 6965
Sold on 19 February 2021 for $1.54 Million
CryptoPunk 6965 is the 3rd punk that made it in our list of the most expensive NFT sold online. This particular example belongs to the line of Ape punks. Only 24 of these NFT crypto Ape Punks were created and put up for sale. #6965 wears a brown hat and has a neutral facial expression like it’s trying to say it isn’t that impressed with what it sees.
The million-dollar sale in February 2021 wasn’t the first time this Ape punk exchanged ownership through an NFT marketplace. The character has been sold a total of four times since 2017. In March 2021, someone bid $3.9 Million for the digital rights on CryptoPunk 6965.
#7. The “Genesis” Estate of Blockchain Game Axie Infinity
Sold on 9 February 2021 for $1.50 Million
Axie Infinity is a virtual fantasy game based on the Ethereum blockchain. The games’ aim is to raise, train, and battle Axies, the name for the in-game characters. Players can also buy and sell their land. This Genesis estate is known as ‘Epic 9 plot Genesis estate’. It’s made up of nine plots of desirable land located in a strategically unique position and with a distinctive look to it.
The buyer’s online alias is Flying Falcon. This Genesis estate represents the most expensive NFT sold for a virtual piece of land ever.
#8. Win the Auction and Name A Song From 3LAU
Sold in March 2021 for $1.33 Million
The DJ 3LAU collaborated with digital artist Slimesunday on the Nifty Gateway NFT marketplace. They set up an auction that allows the highest bidder to name the song in their music video Gunky’s Uprising. The winning bid of $1,333,333.33 was submitted by ‘johni’ in March 2021.
#9. CryptoPunk 4156
Sold on 18 February 2021 for $1.25 Million
The CryptoPunks are obviously in demand amongst NFT fans. Collectible item #4156 is an NFT crypto token that belongs to the Ape category of CryptoPunks. This lad wears a blue bandana on his head and has a striking resemblance to its more expensive colleague #6965. Larva Labs successfully sold this unit for $1.25 Million to an anonymous bidder.
#10. CryptoPunk 6487
Sold on 22 February 2021 for $1.05 Million
CryptoPunk #6487 is the last digital piece of artwork that made it onto our list of most expensive NFT sold ever. It is one of 3840 female punks and the only CryptoPunk of the fairer sex to have reached a 7-digit sale. This crypto art is modest in design and bears no distinctive features or accessories. The figure is entirely bold and wears red lipstick.
Bottom Line
NFT crypto tokens are non-fungible digital assets that provide and guarantee ownership of a piece of art, a parcel of land, a music video, or some text. These one-of-a-kind digital creations are transferred mostly over the Ethereum blockchain in the form of ERC-721 tokens. If you have sent or received ETH in the past, you will have no problems learning how to buy NFT.
Most trades occur via a dedicated NFT marketplace where buyers and sellers auction their creations. The most expensive NFT sold is a series of digital artworks by “Beeple”, which reached a price of almost $70 million. This new movement has turned members of the new generation of digital artists into millionaires. It seems to have found valid applications in gaming and virtual art. It remains to be seen what the future holds for NFTs. Will they become the next big thing in crypto or just a short hype?
Thanks for making me understand NFTs. Now I have one more knowledge of what makes the cryptospace unique. I would like to have my own crypto punk but the calling price is too high for me. One day, I will become a bitcoin millionaire and own a crypto punk.