What are non-fungible tokens (NFTs) and why you should pay attention to the latest blockchain craze
Non-fungible tokens (NFTs) are the latest blockchain trend and acronym to flood headlines. Recently, British auction house Christie’s closed the sale of an NFT by digital artist Beeple for $69 million (£50 million)¹ which set a record for digital art. Twitter founder Jack Dorsey’s first tweet sold as an NFT for $2.9 million.²
Since then, more auction houses, artists, professional athletes, celebrities, and companies have announced or have already launched their own NFTs. So, what exactly are NFTs and are they here to stay?
What are non-fungible tokens (NFTs)?
NFTs are digital tokens that represent ownership of a unique digital item. Think of NFTs like the digital counterparts of one-of-a-kind trading cards. NFTs can be tied to any digital asset including music, artwork, virtual land, sports highlight videos, or even physical objects like Nike’s CryptoKicks.
Each NFT is unique and can’t be duplicated, which is what the term ‘non-fungible’ defines. When you buy an NFT, you gain ownership for that virtual or physical asset on the blockchain, typically the Ethereum blockchain, which you can choose to hold or trade.
This authenticity enforced by a blockchain creates scarcity in the digital world. For example, say you purchase an NFT for a song from your favorite artist. Other people might make a copy of that song you own the NFT for but they don’t own the original signed version and therefore it will not hold the same value. Depending on the item, NFTs can offer fans an innovative way to feel connected to artists, celebrities, or athletes.
Popular NFTs making headlines
- Christie sold an NFT by digital artist Beeple for $69 million (£50m)³
- Twitter founder Jack Dorsey sold his first tweet as an NFT for $2.9 million⁴
- NBA’s Top Shot blockchain trading card platform has generated over $230 million in gross sales for its NFTs, including $200,000 for just one LeBron James highlight⁵
- An animated Gif of a meme called Nyan Cat sold for $620,220.00⁶
- Following other charity-focused NFTs, Matthew Tkachuk became the first NHL player to release his NFT auctioning off digital sports memorabilia to raise money for children’s hospitals.⁷
- Because of the surge in trading card popularity that seems to have stemmed from the NFT surge; Topps, the 80-year old sports collectibles and trading cards company, announced plans to merge with a special purpose acquisition company, or SPAC, in a deal that values Topps at $1.3 billion.⁸
How do you buy NFTs?
Currently you can shop for NFTs online through various marketplaces. Some of the most common NFT marketplaces include OpenSea, SuperRare, Foundation, Mintable, Nifty Gateway and Rarible. Then there are the niche markets like NBA’s Top Shot for fans to purchase basketball highlight NFTs.
Because of the surge in demand for NFTs, they are typically auctioned or released in “drops” where a flurry of investors then race to purchase the NFTs.
How our digital stock exchange ‘Upstream’ is approaching NFTs
We believe the appeal of NFTs for many fans lies in the ability for them to be bought and sold like other tradable assets. This is why we aim to support NFTs alongside the IPOs listed on Upstream.
We think NFTs will be especially interesting to athletes, sports teams, celebrities, and musicians interested in listing fan-driven assets on Upstream. Through Upstream’s affiliation with Global Fan Exchange, a Horizon-powered fan engagement platform led by leaders in sports and entertainment, we aim to make Upstream the go-to place for fans to invest, drive awareness, and share in the success of celebrity and athlete ventures. Creating additional value for our issuers and their fans through NFTs is a natural step we are excited to take.
We think to understand where the NFT market is headed, we can compare it to the traditional collectible item market. If we do that, then it’s fair to assume that some NFTs will gain value over time, while others could end up collecting digital dust.
Will the NFT market become the new way to purchase and value digital real estate or will the bubble pop with only a few NFT subsectors maintaining any value?
What are your thoughts?
About Global Fan Exchange
Global Fan Exchange is a hub for fans to invest in and ultimately trade shares tied to the income streams of their favorite athletes, musicians, and entertainers. Visit us at https://globalfanexchange.com/. Interested issuers can reach us at email@example.com.
Upstream, a MERJ Exchange Market, is a fully regulated global stock exchange for digital securities. Powered by Horizon’s proprietary matching engine technology, the exchange will enable investors to trade shares in SPACs, high-growth startups, and other unique asset classes directly from the app https://upstream.exchange. Interested issuers can reach the team at firstname.lastname@example.org.
Horizon is a fintech company that builds and powers global securities exchanges with an integrated suite of software for compliant issuance, management, and secondary trading of securities. Our in-house solutions combine Wall Street and Silicon Valley to power the next generation of securities offerings and trading in the U.S. and globally: https://www.horizonfintex.com/.
THIS BLOG SHALL NOT CONSTITUTE AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION IS NOT PERMITTED.