What Is an NFT? And How Did Grimes Make $6 Million in Under 20 Minutes Selling Her ‘Crypto-Art’?
What is an NFT?
The internet can't stop talking about NFTs, which have become the hottest new trend for creators who want to sell their digital art online.
On Sunday (Feb. 28), Grimes launched her "WarNymph" digital art collection on Nifty Gateway, a marketplace for digital items and collectibles. In just 20 minutes, she made $5.8 million auctioning her digital art. High-rolling fans were able to purchase exclusive artwork, music and other digital content, all virtual and non-physical.
According to The Verge, the highest selling piece of virtual art from the collection was Grimes' “Death of the Old” video, which features an unreleased original song from the Canadian musician. The one-of-a-kind piece sold to an individual for roughly $389,000.
Two short videos called "Earth" and "Mars," which also featured original music, moved 700 copies, selling for $7,500 a pop and generating $5.18 million.
Grimes isn't the only artist selling her digital work online via NFTs.
To commemorate the anniversary of the famous Nyan Cat GIF, which turns 10 this year, Chris Torres, the artist behind the colorful digital kitty riding a Pop-Tart, remastered the animation and auctioned it as an NFT. According to The New York Times, an anonymous buyer purchased the virtual piece for $580,000 in February on a marketplace called Foundation.
To be clear, however, you'll still be able to find and share the existing Nyan Cat GIF online.
Below, here's everything we know about the NFT craze.
What Are NFTs?
NFT is an innovative tech which allows for the purchase of digital art and other forms of digital media in the form of a verifiable "digital token" that lives on a blockchain. NFTs can represent music, GIFs, digital art and more.
NFTs are tradable but not interchangeable—meaning, you can trade NFTs but each NFT is a unique asset, with a value that differs from NFT to NFT.
According to Forbes, the NFT market was worth roughly $42 million three years ago. Today, the market is valued at over $338 million.
What Does NFT Stand For?
NFT stands for "non-fungible token." Each NFT, which is associated with a unique sequence of digits, is considered a "cryptoasset." Much like Bitcoin, it's a digital asset used to create a viable medium for financial transactions across a blockchain platform.
What Is a Blockchain?
A blockchain is basically a digital ledger and database of transactions that is updated in real-time on a specialized computer network. The records on a blockchain are linked together using cryptographic techniques, which are encrypted and encoded. When you purchase an NFT, the sale is logged on the blockchain, which serves as a sort of receipt.
Who Can Sell NFTs?
Anyone can sell their own NFTs. People can sell anything from music to photographs, digital artwork to recipes, etc. Sellers must have access to a crypto wallet, as well as an account on one of the various trading platforms, in order to sell their NFT content online.
A crypto wallet is a program or device that serves as a secure digital wallet through which you can store, transfer and receive digital currency, such as Bitcoin.
How Do You Buy an NFT?
You can purchase NFTs on various NFT trading platforms and marketplaces, including Nifty Gateway, Rarible, OpenSea and Enjin Marketplace. All you need to do is sign up for an account and connect your digital wallet to purchase the digital content.
NFTs cater to investors and collectors. You can make money on NFTs by buying and selling as certain NFTs go up in value over time, much like antiques or baseball cards.