These days, non-fungible tokens, or NFTs, appear to be everywhere. These digital assets, which range from tacos and toilet paper to music and art, are selling for millions of dollars, much like 17th-century unique Dutch tulips.
But do NFTs live up to the buzz or the cost? Like the dot-com boom or Beanie Babies, some experts believe they are a bubble ready to burst. Some people think NFTs are here to stay and will permanently alter the financial landscape.
What Is an NFT?
A non-fungible token (NFT) is a digital asset that can be images, sounds, movies, in-game objects, and more. They are typically encoded with the same underlying software as many cryptos, and they are bought and sold online, often using bitcoin.NFTs have been around since 2014, but they are just now becoming well-known since they are a more and more common means of purchasing and selling digital art. The value of the NFT market alone in 2021 was an astounding $41 billion, which is almost equal to the whole market for fine art worldwide.
NFTs feature distinct identification codes and are typically one of a kind, or at least one of an extremely limited run. Arry Yu, managing director of Yellow Umbrella Ventures and chair of the Washington Technology Industry Association’s Cascadia Blockchain Council, states that NFTs essentially generate digital scarcity.
This is in sharp contrast to the majority of digital works, which are virtually never-ending. Theoretically, if an asset is in demand, stopping its supply should increase its value.
However, a large number of NFTs—at least in the early going—have been digital works that are already in existence somewhere else, such as well-known NBA game video clips or securitized versions of digital art that are already popular on Instagram.
Perhaps the most well-known NFT of 2021, “EVERYDAYS: The First 5000 Days,” was created by well-known digital artist Mike Winklemann, best known by his stage name “Beeple,” using a composite of 5,000 daily drawings. It sold at Christie’s for an astounding $69.3 million.
The individual photos—or even the full collage of images—can be viewed for free online by anybody. So why are individuals prepared to pay millions of dollars for something that they could download or take a screenshot of?
because the original object can be owned by the buyer through an NFT. Furthermore, it has integrated authentication, which acts as ownership verification. The “digital bragging rights” are valued by collectors nearly as highly as the actual thing.
Walking as a form of exercise became mostly reserved for those unable to partake in more grueling types of fitness for whatever reason.
How Is an NFT Different from Cryptocurrency?
The acronym for non-fungible token is NFT. Though there are some similarities, it is not constructed with the same programming as cryptocurrencies such as Bitcoin or Ethereum.
Both fiat money and cryptocurrency are “fungible,” which allows for trading or exchanging of one for the other. Additionally, their values are identical: one Bitcoin is always equal to another Bitcoin, and one dollar is always worth another dollar. Due to its fungibility, cryptocurrency is a reliable way to transact on the blockchain.
NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). One NBA Top Shot clip, for example, is not equal to EVERYDAYS simply because they’re both NFTs. (One NBA Top Shot clip isn’t even necessarily equal to another NBA Top Shot clip, for that matter.)
So, after months of isolation and Zoom workouts, walks with friends became the new happy hour.
How Does an NFT Work?
Blockchains are distributed public ledgers that record transactions and are where NFTs are found. Most likely, you are most familiar with blockchain technology as the backbone that enables cryptocurrency.
In particular, NFTs are generally maintained on the Ethereum network, however they can also be maintained on other networks.
An NFT is produced, or “minted,” using digital representations of both material and immaterial objects, such as:
GIFs of graffiti art
Sports highlights and videos
Gatherings
Video game skins and virtual avatars
High-end sneakers
Soundtrack
Even tweets count. Twitter co-founder Jack Dorsey sold his first ever tweet as an NFT for more than $2.9 million.
Essentially, NFTs are like physical collector’s items, only digital. So instead of getting an actual oil painting to hang on the wall, the buyer gets a digital file instead.
They also get exclusive ownership rights. NFTs can have only one owner at a time, and their use of blockchain technology makes it easy to verify ownership and transfer tokens between owners. The creator can also store specific information in an NFT’s metadata. For instance, artists can sign their artwork by including their signature in the file.
What Are NFTs Used For?
NFTs and blockchain technology give artists and content producers a special chance to make money off of their creations. For instance, artists are no longer dependent on auction houses or galleries to sell their creations. As an NFT, the artist can instead sell it straight to the customer and keep a larger portion of the proceeds. Additionally, when their work is sold to a new owner, artists can program in royalties to receive a portion of the proceeds. This is a desirable feature because, following their initial sale, artists typically do not receive any additional revenue.
Art isn’t the only way to make money with NFTs. Brands like Charmin and Taco Bell have auctioned off themed NFT art to raise funds for charity. Charmin dubbed its offering “NFTP” (non-fungible toilet paper), and Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH)—equal to $3,723.83 at time of writing.
Nyan Cat, a 2011-era GIF of a cat with a pop-tart body, sold for nearly $600,000 in February. And NBA Top Shot generated more than $500 million in sales as of late March. A single LeBron James highlight NFT fetched more than $200,000.
Even celebrities like Snoop Dogg and Lindsay Lohan are jumping on the NFT bandwagon, releasing unique memories, artwork and moments as securitized NFTs.
How to Buy NFTs
Should you be eager to begin collecting NFTs, you will need to obtain a few essential items:
To begin with, you must purchase a digital wallet that enables you to keep cryptocurrency and NFTs. Depending on what currencies your NFT provider allows, you may need to buy some cryptocurrency, such as Ether. These days, you can purchase cryptocurrency with a credit card on websites like Coinbase, Kraken, eToro, PayPal, and Robinhood. After that, you can transfer money from the exchange to the wallet of your choosing.
Prior to the lockdown, Colleen Logan, vice president of public relations and corporate communications at digital fitness platform iFIT, says the brand recognized an increase of interest in interactive walking, hiking, and running workouts, which she believes had to do with their accessibility. “We want iFIT to reach the broadest number of consumers and walking is an excellent way to connect with the most people,” she explains. In hopes of feeding the piqued interest, the brand opted to invest resources in filming guided walks and runs in beautiful places around the world, like the top of Mount Kilimanjaro, the tallest peak in Africa, or up steep trails in Switzerland. The timing couldn’t have been better. iFIT’s popularity soared — in November 2020, they had 330,000 paid iFIT subscribers, and now they have almost 1.5 million — and Logan thinks it primarily had to do with its unique walks, which fuse fitness and adventure with people’s need for a mental escape.
You’ll want to keep fees in mind as you research options. Most exchanges charge at least a percentage of your transaction when you buy crypto.
Jillian Michaels, health and wellness expert and creator of The Fitness App by Jillian Michaels, has always considered walking an underappreciated workout. “I have always known that walking is the most affordable, accessible fitness solution. For that reason, I have many programs that are either walking only or incorporate walking.”
By the end of the year, others in the fitness industry noticed that walking wasn’t just a workout — it had gotten chic. In January 2021, Apple launched its Time to Walk feature for Apple Watch and Apple Fitness+ subscribers, which the brand described as “an inspiring new audio walking experience.” Each episode featured a different celebrity taking the user on a guided walk, with early guests including Dolly Parton, Shawn Mendes, and NBA star Draymond Green.
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