Non-fungible tokens or NFTs as they are fondly called had a blast this year for “something” that came out of “nowhere”. Like how cryptocurrencies first appeared, took over the world, and surprised us, NFTs did all of these and more. Like cryptocurrencies, they are digital tokens that represent physical things, moments, etc., hold value and are completely based on a blockchain.
NFTs had many highlights this year but before we look at some of these highlights, let’s do a brief explaining of what NFTs are, as some of us may still be in the dark about them.
The abbreviation “NFT” stands for Non-fungible Tokens. It is a digital token that’s a type of cryptocurrency, much like Bitcoin or Ethereum, and this means that it is a collectible digital asset, which holds value as a form of cryptocurrency and as a form of art or culture.
NFTs are unique because they are non-fungible. A fungible asset is something with units that can be readily interchanged – like money. With money, you can swap a N100 note for two N50 notes and it will have the same value. Similarly, digital files such as photos and eBooks can be easily and endlessly duplicated.
This is not the case with NFTs because they are non-fungible. If something is non-fungible, it means it has unique properties so it cannot be interchanged with something else. With NFTs, there is only one of its kind. Simply put, NFTs are unique assets in the digital world that can be bought and sold like any other piece of property, but they have no tangible form of their own.
With NFTs, artwork can be “tokenized” to create a digital certificate of ownership that can be bought and sold. This is done by embedding a unique ID (metadata) into a token that represents the asset. When an NFT is minted, its ID is registered on the blockchain and becomes its passport, enabling users to see and verify its entire history (ownership, creator, price) without the need for an intermediary. The blockchain is a digital ledger that allows the recording of transactions and enforcement of contracts through a decentralized network of computers and without the need for an intermediary.
The following are some highlights for NFTs in 2021;
Twitter’s Founder And Former CEO Put Up His First-ever Tweet On Auction As An NFT
Early this year, Twitter’s founder Jack Dorsey, seeing the buzz NFTs were making, announced that he was going to sell his first-ever tweet as an NFT. The tweet was made by the CEO in 2006 and received as high as $88,888.88 in bidding minutes after Jack Dorsey posted a link that leads to where it can be purchased. The tweet is one of the most famous on Twitter and is the pioneer for the sale of tweets as an NFT. The tweet was sold on an online NFT marketplace called ‘Valuables by Cent’. As at Saturday 6th of March, the bidding for Jack’s first-ever tweet reached a whopping $2.5 million which is the equivalent of €2.1 million, validating the fact that there is a huge potential in selling virtual properties that are original and have been validated through blockchain technology. The highest bid for the tweet, as of that time, came from the CEO of Bridge Oracle; Sina Estavi. He nodded the tweet for $2.5 million. The tweet also got a bid of $2 million from cryptocurrency pioneer; Justin Sun.
The tweet, coined the Mona Lisa of tweets, eventually sold for $2.9 million and was purchased by Bridge Oracle’s Sina Estavi.
Beeple Sold The Most Expensive NFT In History
Mike Winkelmann, a digital artist known as Beeple, sold an artwork as an NFT which holds the record of the most expensive NFT ever sold. The record-smashing NFT sale came on the heels of increasingly valuable auctions like Jack Dorsey’s sale of his first-ever tweet and Elon Musk’s sale of a song explaining what an NFT is as an NFT. The NFT sold for $69 million at Christie’s, an online NFT marketplace. According to the online marketplace, the NFT sale places Beeple “among the top three most valuable living artists”.
World Wide Web Source Codes Sold For $5.4 Million At Sotheby’s
Sir Tim Berners-Lee; the British scientist who invented the World Wide Web in 1989 announced the auction of the original source codes of the world wide web as a Non-Fungible Token (NFT) in June. The auctioning was done at Sotheby’s and was the first item that was created digitally to go on auction at Sotheby’s. The auction started on the 23rd of June and ended on the 30th of the same month at a bid of $1000. The digital artefact which was sold as an NFT is made up of four parts – “The original time-stamped files containing the source code; a letter written by Sir Tim; an animated visualization of the code; a letter written by Sir Tim reflecting on the code and the process of creating it; as well as a digital ‘poster’ of the full code created by Sir Tim from the original files using Python including a graphic of his physical signature; all digitally signed”.
The NFT eventually sold for $5,434,500, surpassing the prediction of experts by almost twice. The proceeds from the sale of the NFT, as announced, would go into the initiatives Sir Tim and Lady Berners-Lee Support.
Andy Murray’s Wimbledon Moment Was Sold As An NFT For $178,000
It was a moment in sports after a Non-Fungible Token that represents the moment Tennis player Andy Murray won Wimbledon in 2013 sold for $177,777 at an auction. Andy Murray, who first mentioned that he’d be putting a series of blockchain-based collectibles representing his Wimbledon victory moment on auction on a platform that sells videos of moments from culture and history as NFTs, saw the sale of this NFT handled by WENEW – the platform he spoke about. Mike Winkelmann, known as Beeple, who sold the most expensive NFT ever is one of the founders of WENEW.
NFT Sales Soared to $2.5 Billion In The First Half Of This Year
In the first quarter of this year, NFT sales surpassed $2 billion. The market saw quite some tremendous growth and the NFT market value tripled to exceed $250 million. The same could not be said for the second quarter as NFTs experienced minor setbacks, but this did not stop them from making their mark in the digital space. NFT sales for the first quarter of this year stood at a record of $2.5 billion up from just $13.7 million in the first half of 2020, according to data from Marketplace. NFT sales have remained considerably high after gaining popularity this year, with numerous NFT sales platforms such as Sotheby’s and OpenSea making impressive NFT sales records.
NFT Sales Soared In August Following Increased Interest In Them
Although NFT sales slowed down this year at some point, they did resume again. Sales of NFTs (Non-Fungible Tokens) surged in August, as interest in the token increased significantly. Sales volumes recorded on the largest NFT trading platform, OpenSea, hit $1.9 billion in August, more than ten times March’s $148 million. In January 2021, the monthly volume recorded on the platform was just over USD 8 million. DappRadar, another platform, recorded 32 known NFT sales above USD 1 million in the past 30 days.
Although NFTs have been existent before the pandemic, they only surged as a result of it. When the pandemic surfaced, many individuals turned to the internet to take advantage of the digital opportunities it provided to make money, NFTs being one of them. Individual NFT artworks are among the most popular and valuable non-fungible tokens created so far in terms of profitability. Clothing and fashion brands are also increasingly benefiting from the NFT trend by releasing a digitized limited edition of their outfits with a collection of iconic celebrity pieces or design signatures. Individuals also make money through tokenizing collectibles, the most popular of which are sports cards. Other people have seized the opportunity provided by NFTs to make money by investing in the non-fungible tokens; they buy NFTs and sell them later at a profit.
NFT marketplaces also rose to prominence in 2021 and NFTs are becoming the new asset class to care about in the crypto space. While the world is still in the process of fully accepting cryptocurrency, many people, organizations alike, have already moved a step ahead by delving into NFTs. With NFTs one thing is certain so far, authenticity issues are addressed and the possibility of counterfeits is eliminated.
It was a great year for NFT and we can’t wait to see what the next hold for this new class of digital tokens.