The world’s first SMS sold at auction as a work of art in December last year.
Cellular operator Vodafone posted a screenshot of the message “Merry Christmas”. It was sold in France at an auction in Ethereum cryptocurrency for € 132,680.
Reality of 2022 – a set of pixels can be auctioned as a painting by a great artist. This is called NFT.
The outgoing year is the peak of interest in the topic. NFT is the top word of the year according to the Collins Dictionary. First, in March, crypto artist Beeple sold NFT for a record $ 69 million at that time at Christie’s. In the end, after a recession in the middle, it continued.
Twitter founder Jack Dorsey sold a screenshot of his first tweet on the platform in the form of NFT for $ 2.9 million, followed by Elon Musk and other celebrities. One of the cases is the same SMS from Vodafone. Let us examine what the pictures on the blockchain represent.
What is NFT?
NFT (English Non-fungible token, non-fungible token) is a certificate of ownership of a unique digital asset. It can be a photo, screenshot, drawing, video or GIF. They are hosted on the blockchain, bought and sold like works of art at an auction.
The peculiarity of NFTs is that they are not interchangeable. If you exchange some bitcoin coins for others, their value will not change. It doesn’t work like that with NFT – there is no general course for this cryptocurrency, each drawing has its own value, and, visually, they can be completely similar.
For example, in artist Josie there are two identical patterns, their cost is different. And this is not the only example. In his collections there are many visually identical NFT tokens with different values.
One theory is that colored bitcoins were the predecessors of NFT. Their functionality was similar to that of the NFT. The main principle of their work was described by the founder of the Ethereum blockchain platform Vitalik Buterin: “The issue of legitimacy is which NFTs are considered attractive to people and which are not. If everyone agrees that one NFT is interesting and the other ineffective, people will choose to buy the first because it will have a higher value. ”
How is NFT used?
Now NFT is a way to monetize your popularity and even trolling. For example, comedian Idrak Mirzalizadeh was deported from Russia this year for a scandalous joke. In response, he put up for sale his canceled residence permit in Russia in the form of a non-fungible token.
“You can offer any amount, even $ 50. If this is the maximum amount offered, I will sell for $ 50. And I promise that the price for this NFT, for this residence permit will increase by the time I return to Russia. And I know for sure that I will return, even in 100 centuries, ”says the comedian. The key is that the higher the interest in the topic to which the NFT belongs, the higher the cost of the token.
A more popular way to use NFT is to monetize popularity. “If NFTs are viewed as a casino that generates profits for already rich celebrities, the result will be less impressive,” Ethereum founder Vitalik Buterin criticized the tokens. However, this is the main way to drive up the value of NFT.
In 2013, the Puzzled Chloe meme appeared. In 2021, the girl depicted on it decided to sell this photo as an NFT – the starting price was five Ethereum, which is about 1.1 million rubles. The trend was followed by Elon Musk – the founder of Tesla expressed his intention to sell his tweet, to which a track dedicated to NFT is attached.
Top 10 most expensive NFT tokens and their prices:
- The Merge – $ 91.8 million
- Everydays: the First 5000 Days — $69,3 million
- HUMAN ONE — $28,985 million
- CryptoPunk #7523 — $11,75 million
- CryptoPunk #3100 — $7,67 million
- CryptoPunk #7804 — $7,6 million
- Crossroad – $ 6.6 million
- A Coin for the Ferryman — $6,034 million
- Ocean Front — $6 million
- CryptoPunk #5217 — $5,59 million
How do I buy or sell NFTs?
NFT tokens are bought and sold on marketplaces. These are platforms specially created for the purchase and sale of non-fungible tokens. They are stored, displayed, sold and in some cases even created here.
Top 6 platforms:
- Nifty Gateway
- NBA Top Shot
The largest NFT marketplace. Its peculiarity is the variety of offers, which overshadows other trading platforms.
Accommodation conditions: to publish a token, you need to pay a commission. It depends on many factors: demand for them, time of day, etc. Usually it is $ 70-100.
A Russian platform that has gained worldwide popularity. Its feature is the ability for authors to receive remuneration for each resale of their work.
Accommodation conditions: commission $ 30-100 for each publication.
Gemini exchange platform. It has a user-friendly interface and an impeccable reputation.
Accommodation conditions: Accommodation is free. Nifty Gateway takes 15% of the commission from the transaction. When reselling an NFT, the author is charged 10% of the transaction.
A platform that requires proof of authorship for each NFT. For this, artists develop a specialized certificate.
Accommodation conditions: placement is free, upon the first sale SuperRare takes 15% of the transaction.
NBA Top Shot
NFT platform with support for the American Basketball League. The concept of the site is to produce and sell digital sports collectible cards.
Accommodation conditions: 5% commission for each sale.
The platform is considered to be more advanced in terms of design and functionality. The peculiarity of the site is that in order to get there, you need to receive an invitation from any author.
Accommodation conditions: the publication is free, 15% from the sale of the token; with each resale, the author receives 10% of royalties.
How do I create an NFT?
Let’s see how to do this using the OpenSea platform as an example.
What you need to create an NFT token:
- Opensea.io website
- Crypto wallet (Ethereum, Meta Mask or other) that will be linked to the profile
- Content you want to upload as NFT
How to do it:
- We open the site opensea.io
- Choosing: Create / My collections
- To add a token, you need to create a collection. Add its logo, title and description.
- Once the collection is created, the tokens themselves can be added to it. We select “Add items”, and then “Add new item”.
- Ready. We upload the token to the site and put it up for auction.
The same steps are described on the dedicated OpenSea page. Each platform has instructions.
Here’s a video that clearly shows the process of creating an NFT on this site.
In 2021, interest in NFT will remain at least at the proper level. Since May of this year, there has been a decline in interest in these tokens – at that time, their sales fell from a peak value of $ 176 million on May 9 to only $ 8.7 million on June 15. Nevertheless, interest in the topic remained at such a high level that NFT became the word of the year.
At the very least, artists and platforms are not going to slow down. In March of this year, SuperRare raised $ 9 million from investors. The funds are intended for further development and restart in 2022.
Next year, there will be many new platforms and token monetization models that will allow creators to control their intellectual property, thinks Be In Crypto expert Mango Dogwood. There will also be new reward models that will underpin their success.
We may be on the verge of redefining the copyright paradigm. NFTs are interesting to the music industry. Dogwood says the authors are interested in this direction. The problem for musicians is that recording studios and streaming services receive the main profit from their work, NFT can change the balance of power in favor of the authors.
It seems that the leap in development in 2021 is just the beginning.