According to DappRadar, the NFT market is more fruitful of 40 billion dollars. The buying and selling of NFTs takes place mainly through platforms that open an online auction.
According to Domus Magazine:
“The market for non-fungible tokens (NFT) in a year has gone from about 340 million to 14 billion dollars, and while still some are wondering what sense it makes invest in a .jpg and many are protesting the environmental impact of transactions in proof of work, luxury brands and auction houses, from Gucci to Sotheby’s are rushing to launch their metaverse.”
To really understand what is the true potential of non-fungible tokens or NFT you need to understand how the digital market moves in 2022 and how the concept of ownership and investment is evolving. A digital resource, which therefore does not exist in physical reality, can assume a very high market value.
Among the most expensive NFTs for example we find the digital work The Merge of the artist Pak that was auctioned on the platform Nifty Gateway & for an equivalent value of $ 91,800.
The Merge was bought by almost 30,000 people: it means that each one has bought a “piece” of the work, obtaining a “proprietary” certificate. But NFTs are not just digital works … we also find audio files, GIFs, videos, memes but also objects that are inside a video game.
What is an NFT
Starting with the name non-fungible token itself, let’s start analyzing what “non-fungible” means. To simplify it means that an NFT is unique and can not be replaced with something else. For example, a Bitcoin is fungible because you can exchange with another Bitcoin to get exactly the same result.
A NFT is not fungible because if you swap it for another, you would get something completely different. NFTs attract the attention of collectors or investors who are only into buying to resell.
How an NFT works
Most NFTs are part of the Ethereum blockchain, a cryptocurrency whose blockchain supports NFTs. The blockchain stores extra information that makes NFTs work in a different way than cryptocurrency, in this case ETH.
There are also other blockchains that can implement their own versions of NFTs even if NFTs don’t work, only attributable to the blockchain but there are also other factors that affect it such as the digital signature that occurs through the hashing process.
How to determine the value of an NFT
It is difficult at first to imagine that a digital work could have an authenticity because until now we have been accustomed to considering the virtual as the copy of the copy of the copy. The concept of ownership and authenticity was born with blockchain technology.
The value, and consequently the price, of an NFT grows according to several factors including uniqueness. This feature is extremely important and in addition to blockchain technology it is based on the relationship of trust between the seller and the buyer.
Other characteristics that determine its value are obviously the aesthetics, the previous sales of NFT in a given context (video game, artist, etc.), and popularity which manifests itself between buyers and sellers. Among the latter it is not important whether they are collectors or pure investors, the dynamics are practically the same.
How to buy an NFT
When it comes to buying an NFT actually we do not refer to the purchase of the NFT itself, but to the fact that the buyer can prove to have full rights to the work, with a digital certificate of ownership that you can generate thanks to the hashing process.
The person who creates the hash and consequently the digital certificate guarantees that the digital work has a property and that therefore it can be sold or exchanged for example with cryptocurrencies. The certificate of ownership is registered on the blockchain which attributes a relationship between the buyer and the work.
The most expensive NFTs of the web
In the ranking of fintech you can find the top 10 of the most NFTs expensive that have been sold so far. The last in the ranking in order of price is a Cryptopunk that has been sold for more of 1.5 million dollars. This already gives us a hint of what range of figures we are considering.
First of all the work already mentioned by Pak, a well-known digital artwork artist who was able to gross nearly $ 92 million in cryptocurrencies from a single work.
As a second we find again a digital artwork, this time by the artist Beeple that was sold for the sum of of 69 million dollars.
The works of art
Surely among the first three sectors that make the market go round there are works of art. When a buyer purchases an NFT of a digital work of art it is actually not owning the “digital file” of the work but will have right to receive a certificate of ownership of this, generally without acquiring the commercial rights of the work.
In the world of NFT Art, billions of euros circulate among collectors and pure investors. One of the revolutions of NFT Art is for example their uniqueness and the impossibility (theoretically) to create a fake, which often happens with physical works.
As the British artist explains Sacha Jafri explains:
“There is a problem that people are not aware of. In the last hundred years, so many fakes of numerous paintings have been created, for galleries it is a big problem and it is a big problem for collectors as well. There are many more out there of what you think. NFTs also give you validation because when you receive one there is a software that scans that piece. It can not be forged.”
Cryptocurrencies: Video Games
In this sector too, NFTs are doing great, we are talking about 9 zero figures. The purchase and sale of NFTs in video games consists in the purchase of non-fungible tokens made available to players. And these can be very different from each other.
For example in the metaverse of The Sandbox there is a real gallery of digital works of art that you can purchase, while in the Axie Infinity video game players can spawn creatures to breed for combat and resell, a bit of the old Pokemon style.
Part of the video game market moves precisely on the basis of NFTs which last year exceeded 2 tenths of the overall earnings of numerous companies that invest in cryptocurrencies and consequently in blockchains and NFTs.
Videos, photos, memes and GIFs
With the premises made so far, we have reached the third big block of NFTs that make the market go round. Since anything that is digital can hypothetically certify the authenticity and the property, then also videos, photos, concerts, shows or live events, GIFs, memes and so on can be included in the NFT.
Jack Dorsey sold the property right of his tweet as NFT, which turns out to be the first tweet ever for the equivalent sum of 2.5 million. An animated GIF of a flying cat has been sold for more of 500,000 dollars and a collection of digital images was yielded as a result of an auction for 70 million!
Another million dollars went for a meme and a video of the vagina of supermodel Cara Delevigne and an image in a .jpg file with a painting by artist Beeple, which was sold for $ 69.3 million. All of these are unique and certified pieces.
