First entirely digital artwork up for auction 0:56
(CNN Business) -
Non-fungible tokens (NFTs) are the latest cryptocurrency phenomenon to go mainstream.
And after auction house Christie's sold NFT's first artwork - a collage of images by digital artist Beepl - for a staggering $ 69.3 million, last week, NFTs suddenly caught the attention of the public. world.
What are NFTs?
In the simplest terms, NFTs transform digital artworks and other collectibles into unique, verifiable assets that are easy to trade on the blockchain.
While that may be far from easy for the uninitiated to understand, the payoff has been huge for many artists, musicians, influencers, and the like, and investors spend a lot of money to own NFT versions of digital images.
For example, Jack Dorsey's first tweet is now bidding for $ 2.5 million;
a video clip of a LeBron James dunk sold for more than $ 200,000 and a "Nyan Cat" GIF from a decade ago sold for $ 600,000.
First virtual artwork sells at auction for a staggering $ 69 million
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But NFTs aren't exactly new.
CryptoKitties, a digital trading game on the Ethereum cryptocurrency platform, was one of the original NFTs, allowing people to buy and sell virtual cats that were unique and stored on the blockchain.
What is the NFT phenomenon taking off now?
"Part of that interest comes from people who enjoy supporting the work of independent creators by purchasing their works," Mike Steib, Artsy's chief executive officer, told CNN Business.
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“Others are intrigued by the idea of taking a digital asset that anyone can copy and claim ownership of it.
The recent NFT holder price records appear to have been largely driven by newly minted crypto and billionaires looking to diversify their bitcoin holdings and more interests for the crypto ecosystem.
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This is what you should know:
What are NFTs?
Non-fungible tokens or NFTs are pieces of digital content tied to the blockchain, the digital database that underpins cryptocurrencies such as bitcoin and ethereum.
Unlike NFTs, these assets are fungible, which means that they can be replaced or exchanged for an identical one of the same value, much like a dollar bill.
NFTs, on the other hand, are unique and not interchangeable with each other, which means that no two NFTs are alike.
Take for example Pokémon cards, rare coins, or a limited-edition pair of Jordan sneakers - NFTs create scarcity among the infinitely available assets, and there's even a certificate of authenticity to prove it.
NFTs are typically used to buy and sell digital artwork and can take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate, and more.
How to buy NFT?
Basically any digital image can be purchased as NFT.
But there are a few things to consider when buying one, especially if you are a newbie.
You will have to decide in which market to buy, what type of digital wallet is required to store it, and what type of cryptocurrency you will need to complete the purchase.
Some of the more common NFT markets include OpenSea, Mintable, Nifty Gateway, and Rarible.
There are also niche markets for more specific types of NFTs, like NBA Top Shot for basketball highlights or Valuables, for auctioning tweets like Dorsey's, which is currently on sale.
But be careful with the fees.
Some markets charge a "gas" fee, which is the energy required to complete the transaction on the blockchain.
Other fees may include the costs of converting dollars to Ethereum (the currency most commonly used to buy NFT) and closing costs.
If you're curious and want to know more about what it's like to buy an NFT, we bought one.
And yes, it is a cat.
(See the story in this link, in English).
How to sell NFT?
NFTs are also sold in the markets and the process may vary from platform to platform.
Basically, it will upload your content to a marketplace and then you have to follow the instructions to convert it to an NFT.
You can include details like a job description and suggested prices.
Most NFTs are purchased with ethereum, but they can also be purchased with other ERC-20 tokens, such as WAX and Flow.
How to do an NFT?
Anyone can create an NFT.
All that is needed is a digital wallet, a small purchase of ethereum, and a connection to an NFT marketplace where you can upload and convert the content into cryptographic or NFT art.
Simple truth?
- CNN's Oscar Holland and Rishi Iyengar contributed to this report.
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