NFTs are tradable, unique items that have taken the internet by storm in recent weeks.
Some of the virtual assets have sold for millions of dollars, but most people still have no clue what they are – or where you can buy and sell them.
Non-Fungible Tokens (NFTs) are a hot new trend that have taken the internet by storm in recent weeks.
Artists and musicians such as Beeple, Grimes and Kings of Leon are turning to the tokens to sell their work.
An NFT is a limited edition, virtual item that can be bought and sold like any other asset – but has no physical form of its own.
The NFT can take the form of a digital image, video file or other virtual asset and is unique, meaning if you buy one, you’re the only person with it.
It works as a certification for ownership of a physical asset which means the NFT will effectively function like a rare trading card.
NFTs are bought using cryptocurrency and run on a blockchain, a decentralised digital ledger that documents transactions, and ownership.
You can turn almost any kind of data into an NFT. People are selling digital artworks, songs and even tweets in NFT form.
More elaborate NFT sales include virtual trainers/sneakers and even digital homes.
Like Bitcoin, you can buy and sell NFTs on specialised online marketplaces.
Here’s a list of some of the most popular:
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Buying an NFT, like any collectable, is a risky bet on the value going up.
If there is no demand for the NFT you buy then you could end up paying a large amount for something that declines in value or that you cannot sell.
NFTs are still a new market so there is unlikely to be the same demand you will find for other physical items such as trading cards, art or classic cars.
You could also create your own NFT but there is no guarantee of a buyer and you could end up wasting your time and money.
A number of items sold as NFTs have already gone for huge sums of cash.
On March 22, Twitter boss Jack Dorsey sold his first-ever tweet for more than $2.9million (£2.09million).
The American billionaire promised to donate all of the cash to a charity battling Covid-19 in Africa.
Artist Krista Kim made a bucketful of cash on March 17 after selling a digital house for approximately $500,000 (£360,625).
The virtual home is called Mars House and can only be viewed using virtual or augmented reality goggles.
Musician Grimes has also raised $6 million by selling several pieces of digital artwork at auction through NFT marketplace Nifty.
Kings of Leon has released its latest album as an NFT, which includes exclusive artwork and gig tickets.
It has raised $1.45 million so far according to crypto website Cointelegraph.
Some of the funds raised will go towards the Crew Nation Fund, which supports live music crews affected by the pandemic.
Gucci is even selling virtual trainers as NFTs that no one can wear. They cost £9 a pop.
In other news, Elon Musk says Bitcoin is now better than real cash.
The PayPal founder’s fortune soared $15billion in a DAY in November due to the skyrocketing price of Tesla stock.
And, Apple fans can now pay using Bitcoin on their iPhones.
What do you make of NFTs? Let us know in the comments!
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