If you’ve heard of Bitcoin, you must’ve heard about non-fungible tokens like NFTs – people like Mark Cuban and Gary Vaynerchuk have firm belief in their power. Many investors prefer to spend millions of dollars on digital collecting items, and it’s something that has exploded in the last few years.

Do you know that digital artist, Mike Winkelmann – known as Beeple – made record $6.6 million on a video clip that was originally bought for only $67K? That’s not it, because more recently, a computer generated display called CryptoPunks was sold for $2 million! Moreover, there’s an example of a crypto art rendition of the Nyan Cat meme which eventually got sold for $590K in an online auction. It’s honestly mind-blowing how this thing is catching up like fire. 

Advocates of NFT believe that their work is essentially a public service. By fixing the loophole in the system, they’re ultimately allowing online artists to get paid for their content. Apparently, NFT allows them to get paid for the distribution of their content online.

There’s another side to the coin, as critics believe that the obsession with NFT is soon going to fizzle out and they’re calling it yet another crypto frenzy.  But look, if you’re new to this, you don’t have to worry about anything.

We’re here to explain to you what NFTs are and whether or not they’re a big deal. 

What’s an NFT?

So what exactly is an NFT? Are they worth your attention? What do they do? These are all questions that come to your mind every time you hear the term. Let’s start with the most basic and easy explanation.

You’ve heard of Bitcoin, right? You must know that they’re fungible and not exactly a commodity. Each unit of Bitcoin can be interchanged with another unit – that’s not the case with NFT. The keyword NFT is fungible as it possess traits of fungibility but they’re unique digital tokens that run on blockchain. It’s some kind of a computer program that can be saved as items in a game; hence, they might have properties that can later be used.

Take CryptoKitties, for instance, it has players who collect different NFTs. In this particular case, digital cats are there to breed with one another with the aim to create more cats with new properties.

There are other examples of NFT, like digital art. This type of NFT is associated to a particular image or sound file. They might also come with their own set of rules pertaining the ability to collect future sales of the work.

It may come as a surprise to some, but most blockchains have their own NFTs – the popular ones for NFTs are Ethereum, responsible for hosting CryptoKitties and top crypto artists like Beeple as we mentioned above. Do you know that hosts the NBA Top Shot collectible game on YouTube?

How does it work?

So far, we’ve established what NFTs are. We know they’re like Bitcoin and used mostly in blockchains. But how exactly are they used?

Well, they’re usually used by artists to mint or create. It is believed that NFT can be minted by literally anyone, but you need to know how to write your own code for this.

Anyway, you must know that the newly minted NFT doesn’t come with the graphic file because the data is most likely stored off-chain – probably on a centralized server.

You have options – you can store the artwork on the Interplanetary File System (IIPFS). Now you must be wondering what an IPFS is? It’s basically a peer-to-peer network that copies a file through several machines and serves as decentralized storage. The NFT carries an original signature that directs you towards that file’s location on IPFS.

Why are NFTs so valuable?

So many investors like Gary Vaynerchuk believe in the power of NFT. Mark Cubin and Vaynerchuk assert that NFTs are literally like digital property. The way you invest on fine wine, paintings, and trading cards – anything that holds value – you should invest on digital versions as well. But since they’re not proper, physical commodities, you will find the NFTs experience is based on digital scarcity instead of physical scarcity. And because of its value, blockchain inspired assets have earned legitimate store value.

Priyanka Desai has the same opinion as Cuban and Garyvee. She asserts that digital property is now essential – if not more than physical property. The reason is simple: we spend more time online than we ever did before.

She simplified the concept and its importance by saying: “The whole psychological nature of feeling that your taste and general outlook is signaled through a digital property. Whether that be audio or [crypto] collectibles or anything else — it's flexing wealth or taste. It's not dissimilar to how people behave in the real world.”

Bailey, analyst, explains the significance by using an analogy. Bailey says that art has no value, at least, when it comes to inherent finances. Like, a Rothko painting might be priced at $40 million one minute but it might become worthless the minute you reveal that it’s not actually by Mark Rothko.

The fact that a name can change the value of the same art is fascinating. Compare the situation with NFTs and you’ll discover that you’re actually purchasing a token and the artwork would look exactly like the token.

Who buys NFTs?

You’d be surprise to find out the names that are attached to NFTs. Mark Cuban, Chamath Palihapitiya, and Gary Vaynerchuk are prime example of people who believe in investing on NFTs.

In fact, Garyvee says that NFTs are the reason he became a millionaire – and maintains that position. He’s been going on and on about their significance on his social media account – he actually has invested on Twitter.

What Are NFTs For?

Most recently, Beeple sold a collection of his work for roughly $3.5 million. Next in line is Christie, who is auctioning one of his pieces which is currently stored in an auction house.

Types of NFTs

There are different kinds of NFTs, mainly three kinds: The biggest one is, of course, used in games. These are the artworks that are used in the virtual world. In fact, you may be surprised to find out how evenly they’ve split in the market.

Gary Vaynerchuk and NFTs

Why is the name Gary V coming so many times in this discussion? Well, if you look at Gary V net worth, you’d know why. Basically, Gary V’s net worth is $160 million, and he says that NFTs are the reason why he became a millionaire in the first place.

be thoughtful, the overall excitement of the NFT space is Remarkable and very long term, a lot of the prices of current projects won't be sustainable when the supply hits over the next 24 months, even with increased demand, it's not sustainable. I'm in this for 45 yrs not weeks

— Gary Vaynerchuk (@garyvee) March 9, 2021

if you are doing a NFT project and you aren't starting with .... "What's in it for the community, long term ..." you're missing a very important point

— Gary Vaynerchuk (@garyvee) March 10, 2021

But what does garryvee do? He has a podcast and a Garyvee YouTube channel. His company’s name is Vaynermedia, and he has a lot of Instagram followers as well, confirming his popularity.

He is married to wife Lizzie Vaynerchuk. So do check out Vaynerx twitter account, because his quotes get picked up a lot for motivation. He has an eye for things – helps him predict the future possibilities and what’s worth investing in. And so, if he encourages you to invest on NFTs, he must be right!

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