What are NFTs, these digital works of art whose value is exploding?

Works sold for several million dollars by artists who are often unknown to the art market, music stars who share their albums in this new format, websites whose ratings are exploding internationally … digitally in recent weeks have been dominated by NFTs. Three letters for Non Fungible Token, which should quickly become crucial.

What is an NFT?

NFTs operate on the same principle as cryptocurrencies like bitcoin, being based on a blockchain. They are therefore tamper-proof, indelible and non-reproducible, giving them their value. However, unlike cryptocurrencies, they are not interchangeable, as they are each unique (non-fungible). This allows their buyers to actually own the rights to a digital work, whether it is an image, an animation or a video.

This work is also quite secure as it is registered on blockchain. As a reminder, blockchain is a technology for storing and transmitting information, transparent, secure and operational without a central control body.

However, it should be clarified that if NFT related to art constitute the most visible face of this technology, they can take various forms (virtual objects for video games, contracts, licenses …).

Do we really own it?

By being based on blockchain, an NFT work becomes unique, but it can be copied at will. Analogously, if you become the owner of an NFT work, other people may copy it, but they will not actually own it. As if a collector bought an original Picasso and the others grabbed a copy. It should be noted that as with any work, its author may decide to prevent its deterioration or misuse of it. Clearly, if the purchase of the Mona Lisa does not entitle you to add a mustache to it, the purchase of an NFT work (in theory) will not allow you to intervene in it.

The artist and author of the NFT work will generally put his creation up for sale and determine the number of tokens that will attest to its authenticity. He can, for example, sell one or five or even a hundred tokens of his work, hence so many versions of it available, but you should know that the fewer there are, the more the work is rare and therefore more expensive it is. Like a collectible Pokémon card for example. The blockchain, which is ultimately an extremely secure and freely searchable outdoor book, makes it very easy to track the author of the work and the holders of the token or tokens offered for sale.

What forms do they take?

Non-fungible tokens are closely linked to art in all its forms. There is no doubt why they are helping to popularize the use of blockchain and cryptocurrencies, a digital world that is still very unclear to the public.

NFTs are basically digital, but are also protean. We therefore find pictures, GIFs, videos, music, drawings, trading cards … Everything is allowed for artists as long as their work is in digital format. The NBA, for example, produced trading cards of its players, sold in virtual pockets, some of which were purchased for nearly $ 1,000.

When was the phenomenon born?

It’s worth going back to 2017 to find the first traces of NFTs’ success. In November of the same year, holders of Ethereum cryptocurrency gave a massive boost to CryptoKitties. Virtual cats, which nearly 180,000 Internet users who own Ethereum have acquired by investing the equivalent of $ 20 million to become their owners. Even at that time, an Internet user had paid more than $ 170,000 to acquire one of these virtual cats. A crazy sum that quickly attracted the attention of the media across the Atlantic, as the NFTs until then were almost unknown.

Why so crazy sums invested?

By 2020, the NFT market will no longer make marketplaces laugh, as a report by Atelier BNP Paribas and the Nonfungible site estimated that NFTs had brewed around 207 million euros over a year. A colossal sum, which should largely be exceeded by 2021.

Several record sales have already taken place in recent days. Singer Grimes, partner of Elon Musk, sold nearly $ 6 million in NFT works in less than 20 minutes in late February. The music group Kings of Leon offers their new album via an NFT platform. While the famous internet cat, Nian Cat, was sold for almost 460,000 euros on 21 February. Until March 11, the famous auction house Christie’s offers to position itself to acquire an NFT work by the artist Beeple. A first in this environment much followed by great art collectors.

It should be noted that many are already betting on the emergence of NFTs as a new vector for digital art. Like classical works of art, the idea is that investors, interested in art without forgetting speculators, should be able to benefit from it in the future. In addition, the Covid context has particularly affected risky investments around cryptocurrencies (still booming), with some investors turning to NFTs to position themselves very early in this market and hoping for a future price jump to achieve a comfortable return on investment. Also beware of the volatility of this system, which may also experience a decline to return to more reasonable amounts.

How to buy

For the two backers who are still reading me, this is where things get real. However, if the numbers for certain sales are enough to make you dizzy, know that NFT plants are sold at reasonable prices, equivalent to a few dozen euros.

But beware, here we do not pay with a classic confidence currency such as the euro or the dollar. Everything goes through cryptocurrencies and platforms dedicated to their purchases. So far, the two most used cryptocurrencies are acquiring Ethereum and World Assets eXchange (WAX).

If you own cryptocurrencies, then it’s time to go for an application dedicated to selling NFT. The MetaMask platform is the best known and offers a secure service to identify, view and purchase NFTs via blockchain. MetaMask is a wallet (digital wallet) compatible with Ethereum, which therefore makes it possible to make purchases and sales directly. But once an NFT is purchased, it is held by you on the blockchain, and MetaMask cannot access it, just like a cryptocurrency.

The value of an NFT will then follow a course, as will stocks, which will vary according to supply and demand. If demand is strong and supply is scarce, prices could explode. Like MetaMask, the CryptoSlam platform is also offered, but it is dependent on the WAX ​​cryptocurrency. Finally, it is also possible to join OpenSea, another service well known to insiders.

How to sell

Are you an artist and do you have flair? It may be through NFTs that you could quickly find glory. First, you also need a MetaMask or CryptoSlam account / wallet. You can then go to another platform called Mintbase, which runs as an artist “Factory”. By attaching your MetaMask or CryptoSlam wallet, it is then possible to open what is equivalent to an online art gallery. You can then export your digital work there and get the one that corresponds to a unique and secure identification number on the blockchain for each work. Works will also be certified, such as when an auctioneer authenticates a piece before going to auction.

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