We are living in a time of mass content creation – TikTok videos, Instagram pictures and 3D video game designs are just a few examples of this boom. Social media and rising tech trends, such as the metaverse, have brought artists and creators to the fore. NFTs are opening up a means of monetising this work, as they can be traded and auctioned in digital art marketplaces.
A special kind of token
NFT= non-fungible token. A digital certificate of authenticity associated with a digital asset. It can be bought, sold and auctioned, meaning that you can obtain digital ownership. They are currently booming in the world of art.
NFTs are linked to a single piece of content and can be…
A digital ‘collage’
Mike Winkelmann, who goes by the name Beeple, pocketed $69 million from the auction of his work ‘Everydays: the first 5,000 days’ at Christie’s auction house.
Iconic NBA plays
The US professional basketball league is already selling non-fungible tokens of short videos from its games via the NBA Top Shot platform.
Clothes for your digital avatar
Fashion brands like Gucci, Balenciaga and Zara have started to launch virtual versions of their products. They have their eyes set on the hyper-personalisation of avatars in the metaverse.
A New York Times column
The text was actually about NFTs and the newspaper wanted to auction it as a non-fungible token. They succeeded – it sold for $560,000.
An album
The band Kings of Leon has already released their latest record, ‘When You See Yourself’, as an NFT. The music industry is currently debating whether NFTs will serve as an alternative funding model.
Blockchain, cryptocurrencies and NFTs – three interconnected concepts
Blockchain
NFTs are built on this network, which makes it possible to verify their source. This technology guarantees the traceability of an asset through a decentralised record of its digital transactions.
Cryptocurrencies
These constitute the main means of payment. Transactions with ‘ether’, the Ethereum blockchain cryptocurrency, are the most common.
How to take the plunge into the world of non-fungible tokens
Whether you’re a buyer or a seller, you’ll want to take note of this!
What you’ll need to perform transactions
– Cryptocurrencies. Virtual currencies based on blockchain.
– Crypto wallet. A wallet for digital currencies.
Where to buy or sell NFTs
– Auction houses. Specialist trading entities that are betting on non-fungible tokens, such as Christie’s and Sotheby’s.
– Specific marketplaces, like OpenSea, Rarible, SuperRare, Foundation and Nifty Gateway.
If you are a seller
Take the following into consideration:
– How to access it. There are both free registration and restricted access versions, for which you’ll need an invitation from another user or to fill in a form for the platform to accept you.
– What’s the service fee? It is a percentage of the NFT price, and will vary depending on the platform you use.
If you are a buyer
You have these options:
– Buying at a fixed price. NFTs cost a given amount.
– Making an open offer. The buyer suggests an amount they consider appropriate.
– Making a bid. This works like an auction.
Take note! ‘Gas fees’
The amount you pay for certain operations. For example, carrying out a transaction. Each marketplace decides when these fees apply.
Unresolved challenges and conundrums around non-fungible tokens
Environmental impact. They use blockchain and cryptocurrencies, technologies that involve high energy consumption.
Speculative bubble. Although it’s a booming market at present, doubts exist about its long-term stability.
Hard to regulate. There are concerns about how to legislate on this global issue to avoid infringements and fraud.
Misappropriation of content. When there is no authorship to convert them into non-fungible tokens.
NFTs still raise a number of questions, but they promise to bring the monetisation of digital art to the forefront of the debate. It is an essential development in an increasingly digital world.
Sources: bbva.com, BeInCrypto, Business Insider, Domestika, El Mundo, Foundation, Gabeiras y Asociados, graffica, MIT Technology Review, Nifty Gateway, OpenSea, Rarible, RollingStone, Superare, The New York Times, The Verge.
