Unless you’ve been living under a rock, you would have heard the buzz surrounding NFTs. Maybe you were at a friends’ dinner party and overheard Brendan (the know it all) talking about NFTs and the world of crypto – often so loudly about how much money he’s made in crypto and in jargon the rest of us Muggles have trouble understanding. Fear not, it’s time to face the inevitability of the New World and understand what’s really going on with NFT’s.
Although they’ve been around since 2014, NFTs are gaining popularity now because they are becoming an increasingly viable way to buy and sell digital artwork. An eye watering US$22billion was spent on NFTs in 2021. That’s a lot of dough! Especially if you compare it to only a year earlier, where a more modest amount of USS100million was invested. It’s no secret this world is growing, and growing quickly.
Just like purchasing from an online store, to enter the world of the Metaverse you need money. Although the type of currency you need to buy NFTs is not what you may be used to. There is a heap of crypto currencies you can purchase, including Ethereum, Solana, Tezos and Bitcoin. Bitcoin’s the OG crypto currency, with Ethereum following closely behind – it’s also what is used to predominantly buy NFTs. Once you’ve got your new digital currency, it’s time to store it in a digital wallet. Often referred to as blockchain or crypto wallets – and there are loads to choose from. Metamask and Coinbase are just two of the most popular wallets used by investors, NFT collectors and crypto-enthusiasts who plan on being involved in this space.
Now that you’ve got your money sorted, it’s time to head to the digital marketplace to peruse the many artworks, music and digital creations that are for sale. Read: shop, shop, shop! OpenSea is the most well-known marketplace for buying and selling NFTs. Here you can scan through thousands of digital creations – anything from ugly jumpers, sporting video clips to bored apes. Some even offer access to exclusive clubs, experiences and unique physical products like tangible artworks.
What makes NFTs so valuable is that, unlike numbered prints or a series of photographs, there are only one of each NFT. Each has a unique code that is embedded into the token’s blockchain. This makes it traceable and unable to be copied. Of course, the market decides what’s valuable and what’s not (or what someone will pay for and NFT). Bored Ape Yacht Club’s price went from US$190 to US$344,000 in one year – helped by celebrities driving the cost up with their keenness to own a piece of digital art history. Said apes (107 in total) were recently sold at auction house Sotheby’s for over US$24million. Yep, that’s quite the increase in value. Lucky you if you were on the BAYC bandwagon.
But, of course as with anything that seems like an easy way to make some cash, there are also drawbacks to the New World aka the Metaverse. In a world that’s largely unregulated, many who choose to invest have also experienced scammers hacking their digital wallets and even stealing their NFTs. And as with any investing arrangement, there are always risks that a potential buyer should be aware of, including volatility and the risk possibility that a downturn in the market could lead to considerable financial loss. So, make sure you do your
homework before entering the New World and next time you see Brendan at your friend’s dinner party, you can feel confident dropping some Meta-Jargon bombs into the convo!
Sources: https://coinmarketcap.com/currencies/ethereum/ https://www.investopedia.com/ https://satelliteart.io/ https://www.revelo.com.au/
Image credit @getyourglass