Entrepreneur Jesse Schwarz, 32, along with a few friends spend A$208,000 for this video clip of LeBron James dunking | Source: The Hustle

Everything You Need to Know About the Billion-Dollar NFT Art Space

From sports trading cards to memes, the sale of non-fungible tokens or ‘NFTs’ has increasingly gained attention with more and more NFT art and collectibles fetching into the millions of dollars. But, what exactly is an NFT? What makes them so valuable? And what might the future hold for these digital assets? 

Although the first NFT was created, or ‘minted’, back in 2014, the exponential rise of NFTs into a billion-dollar industry has only taken place over the past few years and while it may seem like a curious fad now, the NFT space is set to continue to grow.

What is an NFT?

An NFT is defined in the Merriam-Webster dictionary as “a unique digital identifier” that is recorded in a blockchain and cannot be copied. An NFT can be a video, digital art piece, collectible card, even a Tweet.

As for a blockchain, in simple terms, Investopedia describes it as a specific type of database that stores data in blocks and is commonly used as a ledger for transactions.

According to an industry report by Dapp Radar, the NFT space generated approximately A$14.5 billion in trading volume during the third financial quarter.

Where does an NFT’s value come from?

When clip art rocks sell for more than a million dollars, it’s natural to wonder why on earth someone would spend so much money on something just about anyone can save to their own phone. It’s also natural to wonder why anyone would invest so much in a clip art rock, but we’ll get to that later. Here’s just one way of thinking about NFTs in terms of value: much like how you can get an identical print of a multi-million dollar Matisse artwork for free online, it will never be the original Matisse artwork that an art collector has paid millions for.

Despite the production cost of that original Matisse artwork amounting to little to nothing other than Henri Matisse’s time, a canvas and some paints, we attach a heavy price tag to that work based on intangible values. In the same token, NFTs offer value through being extremely rare, if not one-of-a-kind, as well as through the reputation of the NFT creator and the value based on the believed profit potential.

So, how do NFT owners prove they’ve just spent a pretty penny on digital work? Well, NFTs grant a buyer ownership over the original item with built-in authentication to prove and safeguard that ownership and authenticity. In this sense, the owner of a specific NFT pet rock can prove that they in fact solely own a clip art rock that they purchased for the same price as a home.

The most expensive NFTs ever sold

3. Crossroad, A$9 million

Digital artist, Mike Winkelmann or Beeple as he’s known, produced this political art piece that comments on the US presidential election of 2020. Crossroad sold for approximately A$9 million through the digital art auction platform, Nifty Gateway.

2. CryptoPunk #3100, A$15.3 million

Made up of 10,000 unique characters, CryptoPunks are some of the earliest examples of NFTs on the Ethereum blockchain. After originally being offered to Ethereum wallet holders for free, the 10,000 characters are now being sold by owners for millions of dollars. The most expensive eight-bit CryptoPunk character ever sold is CryptoPunk A$15.3 million #7523. Auctioned off through Sotheby’s in June, CryptoPunk #7523 is one of just nine Alien types and is depicted wearing a medical mask.

CryptoPunk #3100 fetched a cool A$10.35 million and is closely followed in sale price by CryptoPunk #7804 which was purchased for A$10.34 million.

CryptoPunks has amassed close to A$2 billion since its inception, with its 44 top sellers all purchased for upwards of a million dollars each.

1. Everydays: The First 5000 Days, A$95 million

Purchased for approximately A$94.7 million through the auction house, Christie’s, ‘Everydays’ by Beeple is the most expensive NFT ever sold. Comprised of 5,000 digital pictures, the record-breaking NFT is the result of Winkelmann creating a new digital picture each day for 5,000 days straight. Bidding for the piece opened at US$100 in March 2021. The almost A$95 million winning bid came from blockchain entrepreneur, Vignesh Sundaresan.

Other notable mentions go to Twitter’s co-founder Jack Dorsey who’s the first tweet in NFT form sold for more than A$3.9 million. And, of course, the NFT pet rock sold for approximately A$1.9 million and was one of 100 EtherRocks; one of the earliest collections of NFTs on the blockchain.

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