colorful nft art
Source: Pixabay

NFT: Why is it expensive and more

An NFT is a Non-fungible Token or as economics define it, NFT is an asset you can exchange for other easily exchangeable units such as money. Recently, Non-fungible Token (NFT) assets have become a hot topic of discussion. The reason is their unbelievably high prices. Many people are now selling their digital assets for up to billions of dollars. Yes, you heard it right, billions!

colorful nft art
Source: Pixabay

However, if you cannot exchange it, it means that this object has unique qualities like a house or painting such as The Mona Lisa and Starry Night. Well, if you want to learn more about the trending and widely discussed NFT, just take a look at the detailed article below!

What is an NFT?

Non-fungible Tokens or NFTs are digital assets that link to a large blockchain system. NFT is not much different from a crypto currency asset. The only difference is, you cannot exchange it. Although, it is tradable as a crypto asset. In other words, NFTs are crypto assets that represent real objects such as artwork, music, or items found in games and videos. Its function is to verify someone’s ownership.

An NFT is non-exchangeable because when you convert an item to an NFT, it becomes unique. Digital artworks, music and other types of collectibles turn into one-of-a-kind items. NFT games are also in the market now. This verifies the authenticity of the artwork and then you can trade it via the blockchain.

In addition, as BBC has explained, the NFT that is spreading in the digital world is a token that can take the form of a certificate of ownership for these art pieces or assets. This mostly include digital assets.

bored ape
Source: BBC

Why are NFTs expensive?

These days it is easy to download digital objects and turn them into AI such as images and music. It is also possible to sell tweets as did Jack Dorsey , founder and CEO of Twitter .

He sold his first tweet as NFT. The 15-year-old’s tweet only had a simple sentence “just set up mytwttr”. As a matter of fact, many people are willing to spend money to buy these assets. The first tweet by Dorsey’s was offered 2.5 million US dollars, equivalent to 358.68 billion rupees. Of course the price is fairly fantastic, especially for a nudge on a huge social media platform such as Twitter.

The problem is anyone can copy or reproduce these digital assets with no credits to source and very little effort. This is where NFTs come into play. Artwork can now have a digital watermark to represent someone’s ownership of a digital asset, such as buying an item with a signature print on it.

NFT Development and Controversy

If you find yourself asking about the future of this trend and how long lasting is it? Hear Spice VC founder and managing partner, Tal Elyashiv out. He says that this trend is going to be long term. According to him, this will be a huge in making a difference.

“I think this is very real and I think it has a lot of strength to survive,” he said, as quoted by CNN .

One of the sellers working with NFT, namely Shelupinin also mentioned the same thing. He believes that as long as cryptocurrencies (digital currencies) , especially Ethereum-based ones will continue to grow and the NFT market will thrive.

In addition, he has sold 226 different works since 2019. Only 15 ETH or about 27,000 US dollars (Rp389.4 million).

The increasing value of money in the Ethereum ecosystem has to be ‘parked’ somewhere and NFT is the best place.” he said.

According to a report a few months ago by blockchain website Non Fungible and its subsidiary BNP Paribas L’Atelier, the NFT market has quadrupled as of 2019.

This figure has touched more than 250 million US dollars . As for Ethereum, the account jumped 160% in January 2019 and the price of the currency jumped to 1.355%.

pudgy penguin
Source: Crypto News

However, behind the tantalizing prospect, there have been various controversies, mainly related to intellectual property rights such as that experienced by Indonesian illustrator Kendra Ahimsa or Ardneks.

Kendra received more than 20 reports of plagiarism by a crypto activist named Twisted Vacancy. The reason is, Twisted Vacancy creates tokens and sells them for thousands of US dollars. In cases like these, the original creator is at a much greater disadvantage. Because token creators can get fantastic benefits by registering the original creator’s work on the blockchain first.

Most Expensive NFT Assets

NFT digital assets are usually sold at high prices, reaching millions of dollar. What are the most expensive NFT assets of all time? What was the selling price? Here’s everything you need to know!

1. Everydays: the First 5000 Days

This is the most expensive NFT in the world. The digital asset, Everydays: the First 5000 Days, was created by artist Mike Winkelmann aka Beeple and went on sale in March 2021.

The First 5000 Days
Beeple the first 5000 days

The NFT in the form of a collage of images made since May 1, 2017 was initially set at 100 US dollars. Unexpectedly, this asset jumped to millions of dollars and sold for a whopping 69 million US dollars.

2. Crossroads 1/1

Still from Beeple, this time there is Crossroads 1/1 which is part of Beeple’s first NFT sale at Nifty Gateway. This 10-second video features a portrait of Donald Trump sleeping in the park.

Crossroads 1/1 nft
Crossroads 1/1

As of October 2020, this digital artwork is priced at $66.66. But after the results of the presidential election came out and Trump lost, the price of this NFT shot up sharply to penetrate the figure of 6.6 million US dollars. 

3. Forever Rose

forever rose
Source: Petapixel

Kevin Abosch’s Forever Rose is perhaps the most alien of NFTs. Even though the price is fantastic, this digital asset is not as well known compared to other works. This NFT was created in 2018 and sold on Valentine’s Day for 1 million US dollars. At that time, NFT was not as popular as it is now so this asset was less well known.

4. Cryptokitty Dragon

Cryptokitty Dragon
Source: Jalantikus

Cryptokitties is a crypto-producing game that is currently popular. In this game, you can get NFT in the form of a virtual cat with varying prices. The most expensive, there is a cryptokitty called Dragon which sold for 600 ETH or the equivalent of 1,068,558 US dollars. Interested to try this game?

5. Metarift

Metarift 769a1

An artist named Pak created an artwork called Metarift and it was sold in March 2021. The initial price was around US$888, but at the last minute the price went up to US 904k$. 

Finally

The NFT fever has just started and is rising  by the second. This digital asset is suitable for those of you who like to collect rare items with the aim of investing. Stay tuned for more NFT related content.

Rosheen Imtiaz
Content writer here at Eklipse. I love coffee, cats and video games. Find me on the blog as I share my thoughts about games and more.