The internet is buzzing these days with discussions around NTF’s. So, what exactly are NFT’s? Are they a fad, or are they here to stay?
NFTs stand for non-fungible tokens, which means they are unique items that can’t be replaced, unlike Bitcoin, which is fungible. NFT’s are part of the Ethereum blockchain.
To put things into perspective, here are some examples of NFTs that exist today:
- A digital artwork.
- An essay.
- A digital collectible.
- A domain name.
- A ticket that gives you access to an event or a coupon.
Several NFTs have made headlines for selling for astronomical prices. Here are some examples:
- The first tweet: Twitter founder Jack Dorsey’s first tweet published in March 2006 was auctioned for charity and was bought for $2.9 million by a Malaysian-based buyer.
- Hashmasks is a living art collectible put together by more than 70 artists worldwide.
- The First 5000 Days: A digital piece of art created by Mike Winkelmann (Beeple).
- Crossroads: NFTCrossroads was created by Beeple as a response to the 2020 presidential election. It was auctioned on Nifty Gateway and got $6.6 million.
Brands and NFT’s
If you are a business, you should pay attention to NFT’s as big brands have already started experimenting with them. They include the following:
- Taco Bell: The famous fast-food chain sold 25 digital art tokens on the NFT Rarible marketplace.
- Charmin: The toilet paper company sold toiled paper-themed NFTs, branded as NFTP (non-fungible toilet paper).
- Pizza Hut: Pizza Hut Canada put a pixelated pizza on Rarible for 0.0001 ETH ($0.18). The idea was that it should be affordable, as the cost of a bite of Pizza, Megan Farquhar, Executive Creative Director at Ogilvy, the agency responsible for the campaign, told Decrypt publication.
The NFTs’ bubble
So, will the NFTs bubble ever pop?
Analysts like David Hoffman, the co-founder of Bankless newsletter, is a staunch believer in NFT’s power.
He wrote: “Not all humans are finance geeks, but all humans are culture animals. NFTs are the marketable surface area that Ethereum needs in order to go mainstream.”
However, according to data from Nonfungible website, the number of daily sales across all NFT marketplaces has declined from a high of 138,109 on Aug. 30 to 42,372 on Sept. 21
These market developments prompted podcast host and Twitter user Dennis Porter to suggest that “the NFT market has died.”
He said: “As I’ve been predicting (despite getting intense backlash from everyone, including bitcoiners) the NFT market has died.
Average price of NFTs have dropped over 99%. Liquid death has come. Sorry not sorry for calling this market a scam.”
The dangers of NFT’s
Investing in NFT’s is not risk-free.
Cybercriminals can copy an NFT token, and people can end up buying fake NFT tokens. So people should check the authentication of an NFT token before buying them.
According to the CEO of L’Atelier BNP Paribas, buying NFT’s is akin to gambling in a casino.
“I think it’s probably akin at this stage to going into the casino,” said John Egan, CEO of L’Atelier, in an interview with BNN Bloomberg. “You know you’re going to spend money, but maybe you’re doing it for the enjoyment, for the experience. If you win, you’ve got lucky.”
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