Before 2021, most of us probably had no idea what an NFT (non-fungible token) was. But by the second half of the year, those three letters managed to find their way into our everyday lexicon.
NFTs exploded onto the scene with very little warning, but the idea had been quietly simmering away in the background for a good few years before.
The first NFT can be traced back to 2014, when Kevin McCoy created and sold his digital artwork, Quantum. The pixelated video which was then referred to as a ‘monetized graphic’ was sold by McCoy for $4 – it’s now worth $7m.
The rise in popularity of NFTs comes with the growth of technology. As society becomes more and more focused on tech, our world as we know it is adapting with the shift. While NFTs in their early days mainly saw artists creating digital artwork, today brands in every sector from food to clothing have followed suit.
They aren’t merely another product, but using NFTs as a way of creating a metaverse that connects the customer to a brand through technology.
As a customer, NFTs are definitely worth exploring – especially if you have a vested interest in the brand. But before you fall down the rabbit hole, here’s everything you need to know.
What is an NFT and where did they start?
2021 saw cryptocurrencies grow in popularity – but it was really the year when NFTs stole the show. In March of 2021, auction house Christie’s sold an NFT for the first time.
This was a digital piece of art called Everydays: The First 5,000 Days, by a graphic designer known as Beeple. The piece was a digital collage comprising 5,000 pieces of art that Beeple had produced everyday since 2007.
Since then, ‘NFT’ has become the acronym that everyone heard but didn’t necessarily understand.
An NFT is a non-fungible token – a token that can’t be traded in for the same item. Think of them as personal one-of-a-kind trading cards or collector’s items – only purely in a digital format.
NFTs can be any type of digital asset, from music to domain names. They can even be tweets, as was seen when Twitter founder Jack Dorsey sold his first ever tweet as an NFT for over $2.9m. Essentially, any digital asset has the power to become an NFT – so long as there’s a market for it.
How do NFTs work?
NFTs are part of blockchain, a public ledger that records transactions and tracks assets. These assets can be tangible, meaning things like cars or houses, or intangible, which includes patents and copyrights.
NFTs exist on the Ethereum blockchain, a decentralized public database and though the transactions are in cryptocurrencies, that’s where the similarities end.
Unlike cryptocurrency, NFTs are uniquely identifiable. No two can be the same. Whereas comparatively, you can exchange one bitcoin for another, and both will have the same value.
Who is buying NFTs?
Anyone can buy an NFT.
Just like any physical collector’s item, some buyers are avid collectors or investors, others are fans of a particular brand. Others just simply like the digital product itself.
NFTs aren’t just for the incredibly tech-savvy – nowadays there’s an NFT to suit everyone. That being said, before you reach for your credit card, it’s important to remember that most NFTs are bought in cryptocurrency.
You will need to connect your cryptocurrency wallet to a digital marketplace to purchase.
Why should you buy an NFT?
There doesn’t need to be a reason to buy an NFT.
Have you ever bought a piece of art, downloaded a song or even purchased a game simply because you like it? The same applies to NFTs. Of course, that being said, there are plenty of unique perks that come with purchasing NFTs.
NFTs are an exclusive digital token that are wholly unique. Some NFTs are even tickets that grant you exclusive access to events, conferences or promotions. For instance, Gary Vee of VeeFriends used them as admission for his exclusive conference, VeeCon.
Because of their exclusivity, NFTs are a collector’s dream. Think of them in a similar vein to Pokemon cards, where often we were more concerned with collecting our favorites than selling them for profit.
Collecting on the blockchain makes NFTs even more desirable. Through blockchain, you can see all of the historical data of NFTs, almost like a digital thumbprint, which makes buying and trading a lot simpler and safer.
And most importantly, NFTs can also bring you closer to your favorite brand. Many people use NFTs as a way of gaining access to exciting perks they can’t get anywhere else, creating a strong relationship between both the buyer and the brand.
These perks could be anything from discounts to access to limited edition items and more digital assets, and even early access to new launches.
Would you like to see an NFT from GravaStar in the future? Watch this space.