For the past two years, the tech world has been abuzz about NFTs, or non-fungible tokens. However, some people who aren’t as digitally savvy still aren’t sure what NFTs are and why there’s hype around them.
A NFT is a “digital representation of ownership,” Brandon Buchanan, founder of Meta4 Capital, told Finurah. Meta4 Capital is a Miami-based venture capital fund that invests in NFTs. Buchanan said NFTs are proof that you bought something that lives on the Internet.
“In the way that a receipt proves that you purchased something from your local convenience store, or a stock certificate represents ownership of a public company, a NFT represents your ownership of a unique digital item,” he said.
A digital item could be anything from videos to audio recordings. It could also mean digital art, Buchanan said.
The tech world is excited about NFTs because people around the world are evolving into a more digital society, Buchanan said.
Artists and other entrepreneurs can sell NFTs and “re-architect the internet in ways that benefit the individual users as opposed to the big tech companies,” Buchanan said. Besides the money, one other reason tech enthusiasts are high on NFTs is because they offer someone a true one-of-a-kind ownership of something unlike the way forgeries and knock-offs of shoes and purses are created today.
“I can not falsify which NFTs are being held in my cryptocurrency wallet,” Buchanan said. “With NFTs, it is abundantly clear what is real, what is fake, what is a copy. It’s codified and that verifiable scarcity is what makes them so critical as the next wave of how we transact.”
The number of NFTs available for purchase and the platforms selling them have exploded since 2020. Part of that eruption stems from athletes, celebrities and prominent artists diving into the trend.
Snoop Dogg, Method Man and Doja Cat have all jumped into the NFT world in one way or another recently. Filmmaker Quentin Tarantino plans to sell NFTs of the 1994 film “Pulp Fiction,” which starred Samuel L. Jackson and John Travolta.
Buchanan and other business leaders believe NFTs are not a fad and will be an item for purchase for decades to come. Major brands like Taco Bell, Pizza Hut, Pringles, Adidas and Visa have all invested in NFTs, believing the assets could become a new revenue stream.
How to Buy a NFT
To purchase a NFT, someone must first visit Coinbase or OpenSea and create a cryptocurrency wallet. After that, a person would need to convert their real cash into a cryptocurrency using one of those platforms. The cryptocurrency will sit in the wallet until a person purchases a NFT.
NFTs, for now, can only be purchased through cryptocurrency like Bitcoin, Ethereum or Solana. Some experts believe that will change in the future.
People purchase NFTs for different reasons, including investors who want to see the value of their asset grow over time and the diehard art collector who just wants to show off a piece to their friends or family.
Celebrities are piling into the NFT frenzy because they have seen that selling them could bring in millions of dollars. Artist Mike Winkelmann (aka the digital artist Beeple) sold a NFT last year for $69 million. Other pieces have sold for hundreds of thousands of dollars.
Black Artists Cashing In
Black artists, who are often locked out of the high-brow art world, have been turning to NFTs to sell their artwork. And many have been successful.
Canada-based artist Lana Denina, 24, has reportedly earned more than $300,000 by selling her artwork in NFTs. There’s 12-year-old Nyla Hayes, who has raked millions by selling her art in the form of NFTs, Business Insider reported. Hayes’ LongNeckieLadies collection consisted of 3,333 portraits of women and sold out in hours, in the process earning her 1,394 Ethereum (ETH) cryptocurrency, which is approximately worth $5.8 million from her primary and secondary sales, Interesting Engineering reported. Time magazine picked Hayes as the first artist for its own NFT platform called TimePieces.
“There are so many hurdles and obstacles involved with gaining any sort of recognition within the art world as a Black man, as a man of color or as any person of color. The NFT space is changing that and the exhibition is giving us an opportunity to be seen,” Black NFT artist Vakseen told CoinDesk.
Risks of Buying NFTs
There are some risks with buying an NFT. There have been some high-profile cases of fake NFTs being sold. According to Make Use Of, there are many ways to get scammed when buying an NFT. Among them, buying from a fake marketplace or dealing with a fake sellers impersonating real artists.
Be diligent and try and verify as much as possible, such as the artist, before buying.
