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What are NFTs and why are some price millions?
A digital-only artwork has sold at Christie's public sale house for an eye-watering $69m (£50m) - but the profitable bidder will not obtain a sculpture, painting or perhaps a print.
Instead, they get a singular digital token known as an NFT.
Where Bitcoin was hailed as the digital answer to currency, NFTs are now being touted because the digital answer to gatherables.
But there are plenty of sceptics who think it is all a bubble that's going to burst.
What is an NFT?
NFT stands for non-fungible token.
In economics, a fungible asset is something with units that can be readily interchanged - like money.
With cash, you can swap a £10 note for two £5 notes and it will have the same value.
Nonetheless, if something is non-fungible, this is inconceivable - it means it has unique properties so it can't be interchanged with something else.
It could possibly be a house, or a painting such as the Mona Lisa, which is one of a kind. You'll be able to take a photograph of the painting or buy a print however there will only ever be the one unique painting.
NFTs are "one-of-a-kind" assets in the digital world that can be purchased and sold like some other piece of property, however they have no tangible form of their own.
The digital tokens will be considered certificates of ownership for virtual or physical assets.
How do NFTs work?
Traditional works of artwork akin to paintings are valuable because they're considered one of a kind.
But digital files can be simply and endlessly duplicated.
With NFTs, artworkwork will be "tokenised" to create a digital certificate of ownership that may be purchased and sold.
As with crypto-currency, a file of who owns what is stored on a shared ledger known as the blockchain.
The records can't be forged because the ledger is maintained by 1000's of computer systems across the world.
NFTs also can include smart contracts that will give the artist, for instance, a cut of any future sale of the token.
What's stopping individuals copying the digital art?
Nothing. Millions of individuals have seen Beeple's art that sold for $69m and the image has been copied and shared countless times.
In many cases, the artist even retains the copyright ownership of their work, to allow them to proceed to produce and sell copies.
But the buyer of the NFT owns a "token" that proves they own the "authentic" work.
Some folks compare it to buying an autographed print.
Individuals are paying millions of dollars for tokens?
Yes. It is as wild as it sounds.
How much are NFTs value?
In theory, anybody can tokenise their work to sell as an NFT however curiosity has been fuelled by recent headlines of multi-million-dollar sales.
On 19 February, an animated Gif of Nyan Cat - a 2011 meme of a flying pop-tart cat - sold for more than $500,000.
A couple of weeks later, musician Grimes sold some of her digital artwork for more than $6m.
It's not just art that's tokenised and sold. Twitter's founder Jack Dorsey has promoted an NFT of the first-ever tweet, with bids hitting $2.5m.
Christie's sale of an NFT by digital artist Beeple for $69m (£50m) set a new report for digital art.
But as with crypto-currencies, there are considerations in regards to the environmental impact of sustaining the blockchain.
To read more information about nft websites have a look at our own web-page.
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