NFTs craze is ample in the world of cryptocurrencies and blockchain. These days we can witness some phrases like Non-Fungible Tokens and crypto art being flung out.
Although this significant innovation commenced in 2017, the industry caught its mainstream popularity over the last year. We have seen devotees being bullish and paying $500k for a picture of a rock or millions of dollars for some amusing depiction of crazy-looking penguins and apes in this span of time. However, it is really indispensable to note that the Non-Fungible Tokens industry has constructed a great amount of speculative buzz wrapping itself.
NFT world is unwinding with time and apprehending more utility. More and more projects are endeavoring to catch up with the hype, but not all the projects are achieving such a level of attention. Today, there is an ostensibly endless supply of digital art that can be traded using blockchain technology.
What is an NFT, and why is it so expensive?
There is nothing like a flurry of NFTs which leave you thinking, "what is going on here?". This similar feeling was encountered by me as well when I first came across the industry. As these crypto-collectibles are peddling like 17th-century exotic Dutch tulips, everyone is tempted to dive deep into this industry.
As the name suggests, Non-Fungible Tokens mean these tokens are unique and cannot be substituted with something else. Each of the tokens depicts real-world assets like music, art, in-game items, videos, etc. Although NFT tokens are coded with the same underlying software as many cryptocurrencies, it retains some extra information in their metadata.
This info basically includes a link that redirects us to the asset which the token is representing. Notably, the creator of the project can also add some extra details. According to Arry Yu, managing director of Yellow Umbrella Ventures:
"Essentially, NFTs create digital scarcity"
Basically, having an NFT of some digital artwork means having the ownership rights of that particular piece. Instead of having an actual oil painting to hang on the wall, the buyer gets a digital file instead. Notably, the digital grandiosity rights are being more valued than the underlying items themselves.
The hype exploded amid Beeple selling an NFT for a whopping $69 million at Christie's auction house while setting a record for artists. If we figure out why individuals are willing to pay for these collectibles, we will find numerous reasons, including the artists themselves.
It is noteworthy that most of the expensive projects are being sold by some popular creators globally, from Banksy to Beeple. Rarity is another price driving factor. Notably, Non-Fungible assets are either limited editions or have a fixed number of tokens. In theory, with the increase in demand, the value of the tokens grows simultaneously.
The novelty factor is also a big part of the prices, as NFT is an innovation that helps invest in digital items and own them.
As mentioned above, it is clear that the price of Non-Fungible Tokens depends on the appeal and intrigue of the underlying art or anything. Let's know about some NFT projects for which insane prices have been paid.
Crossroad - Beeple’s short video NFTs
Sold for $6,660,000.
A short 10-second video, a kind of short movie designed by Beeple, is entitled Beeple's Crossroad. The video depicts some people walking on the road close to open green land with a tree beside which the people are ignoring a large fallen body with barbs written all over it.
The #1/1 from beeple's first NG drop has just resold on the secondary market for $6.6 million.
History has just been made.
Congrats to beeple and of course to @pablorfraile for the sale. pic.twitter.com/mTYG4VABSw
— Nifty Gateway (@niftygateway) February 25, 2021
Notably, the artist's work is highly reputed because they always are slightly different from all the projects in the industry. Moreover, the prices of his collections articulate the value of the project.
CryptoPunk #7804 - 2D pixelated avatar NFTs
Sold for $7,600,000.
CryptoPunk is a collection of 10,000 one-of-a-kind 2D pixelated art. The design of each of the Avatar NFTs has been generated randomly.
"Giving a deep dive into the project, we have studied that Scarcity, Hedonic Value, and Popularity of the project is what takes its price to the moon."
In the project, we have one incredible piece of art. The unique trait of CryptoPunk #7804 is a cool cap, pipe, and shades to boot. Moreover, it is one of the just nine 'Alien' punks, making it more valuable. It is also noteworthy that the NFT was sold on March 10, 2021.
Although it is not one Punk that is so worthwhile as further, we have more of them on the list. But we can consider that it is one of the collectibles we must be ecstatic to have minted when first launched.
CryptoPunk #3100 - One of Alien CryptoPunk NFTs
Sold for $7,670,000.
A day after CryptoPunk #7804 was sold, we witnessed headlines of another punk being sold from the NFTs collection, CryptoPunk #3100.
CryptoPunk #3100 is yet another 'Alien' punk, but its rarity trait is sporting just a headband this time.
However, it became more expensive after surpassing CryptoPunk #7804 by more than $700,000. Furthermore, currently in the Non-Fungible industry, it is deemed as the seventh most rare CryptoPunk NFT.
CryptoPunk #4156 - One of Ape CryptoPunk NFTs
Sold for $10,260,000.
If we are talking about pricey NFTs, the list is always loomed by the ever-popular CryptoPunk project. Unsurprisingly now in the list, we have CryptoPunk #4156, which is one of the distinctive Twenty-Four Ape Punks.
CryptoPunk #156 also has only one trait, which is Bandana, that one of the 333 Punks has in the project.
The NFT is also considered the third most expensive Punk of all time. Although after the sale of #3100, the CryptoPunks were able to capture all the headlines. Surprisingly, on December 9, 2021, the project burst again with the bigger boom and gave a solid return on investments.
CryptoPunk #7523 - One of Alien Punk NFTs
Sold for $11,750,000.
The sale of yet another CryptoPunk NFT blew all of its fellows this time out of the ground. CryptoPunk #7523 is known as the third rarest collectible in the NFTs collection.
CryptoPunk #7523 has three unique traits: An earring, a Knitted Cap, and a Medical Mask.
CryptoPunk #5822 - Super-Expensive Alien Punk
Sold for a whopping $23,700,000.
When the world began to look at why these pixelated arts are being sold for millions of dollars, we got another surprise. Yet Another Alien Punk sold for more than double the last highest sold CryptoPunk. Indeed, CryptoPunk #5822 marked the history for the crypto-collectibles collection.
CryptoPunk #5822 is one of the nine unique Aliens with only one trait. Bandana is a trait that only 333 punks have.
This NFT is one of the most expensive CryptoPunk that has ever been sold.
HUMAN ONE - Beeple's Hybrid NFTs
Sold for $28,985,000.
Beeple has three looming works of art that successfully get a position among the top 10 sold NFTs. Notably, HUMAN ONE is one of his great works that was sold in November 2021. The 3D video sculpture portrayed a hybrid of physical and digital technology. The video comprises a man wearing a space helmet and walking in different surroundings.
Clock - Showcasing Julian Assange
Sold for a whacking $52,700,000.
It is incredible to see that not only some art pieces but some texts with great meaning can also be sold for whopping millions. Pak and Julian Assange, the founder of WikiLeaks, created an immense Non-Fungible Token piece with the title "Clock". The NFT showcased how long the founder of WikiLeaks has been imprisoned. The NFTs project's bid winner was AssangeDAO, who aimed to raise funds to support Assange.
Everydays: The First 5000 Days - One of NFTs by Beeple
Sold for $69,300,000.
"Everdays: The First 5000 Days" is the most expensive Non-Fungible Token created by Beeple. It is also notable that the NFT has been sold to one sole owner. The NFTs project is very high tier and highly valued within the community. We can say that the artwork is essentially a collage of 5000 different art pieces. Beeple had pledged back in 2007 that he would be creating at least one piece of art every day. And this NFT project is the result of that pledge only. If we consider the funds he was able to make with this project, it seems it was worth the effort.
The Merge - Most expensive NFT to date
Sold for $91,800,000.
'The Merge' is the most expensive crypto collectible that has ever been sold. The NFTs project was created by Pak, who also created "Clock" to help the founder of WikiLeaks. Sold in December 2021, this NFT has almost 30k collectors pitching all together for the total cost.
Furthermore, it is also significant to note that the most expensive project is the only NFT with multiple owners in this list, besides Clock, as a decentralized Autonomous Organization owns it.
How high is the ceiling for NFTs?
There is no deficiency of speculators who see the cryptocurrency and NFTs market as a bubble. It is believed that the future doesn't seem optimistic for investors and enthusiasts. However, the prices mentioned above for such arts are not something we should be surprised about.
The hype is nothing new because people are willing to pay millions for items associated with great names like Pablo Picasso and Leonardo Da Vinci. But one is essentially notable that the NFTs are nothing tangible.
Considerably, we need to comprehend that there is no way to justify whether an NFT project will boom in the future because these collectibles have no specific value more than what investors are giving to them.
On the other hand, there is no limit on how many Non-fungible tokens can be created, which brings more uncertainty about whether a particular asset will boost over time.
However, we can conclude that if today someone is holding an NFT, which someone else is looking to own, they will have to pay a higher sum for what the other person has paid to get the ownership. This shows that although the project does not relish, we have a chance to sell it for a higher price. So willing to own an NFT now is not a lousy opinion.
Although there is no certainty, we can be bullish about such digital collections because these assets have a potent community who believe that Non-fungible Tokens are not just hype and have true worth.