Here's Why NFTs Are Selling for Millions
Breaking down the latest (very expensive) trend you have definitely heard of.
When non-fungible tokens, or NFTs, first gained the attention of the public a few months ago, few understood what they were and what they were for. Today, they are a booming market, selling for thousands and even millions of dollars apiece. In February, sales of NFT tokens reached $500 million, which is twice as much as throughout all of 2020. According to the Crypto Art website, more than 191,000 digital art objects have already been sold for a total exceeding $533 million.
The distinguishing feature of NFTs is that their underlying technology certifies and guarantees the authenticity of a tethered item, raising its value. Today, world stars tokenize their paintings, songs and even Twitter posts to protect their copyrights, while collectors can buy a Picasso painting without leaving their homes or fearing that it may be a forgery.
Making a fortune selling virtual paintings
Unlike typical collectibles, an NFT painting may not necessarily be hung on a wall. Rather, it allows for an unlimited number of items in a collection. In February, a short animated video by American digital artist Beeple depicting an image of a naked Donald Trump was sold for $6.6 million. Four months prior, it was on sale for just $67,000.
Due to their inclusion at some of the largest auction houses, like Christie's and Sotheby's, digital pictures are sold with the same demand as classics. Christie's recent sold another Beeple NFT — a collage of thousands of images that he created daily for years — to a Singapore-based crypto investor who paid $69.3 million.
Sotheby's, meanwhile, began collaborating with an artist known as Pak who was auctioning an NFT-format work called 'Metarift' on Makersplace. On March 19, an NFT art collector nicknamed 888 offered to buy the painting for $888,888. A day later, another buyer under the nickname of Danny raised the bid to $904,413.
Where to buy NFT art
Auctions specializing directly in virtual art already exist. Works from Pak, Mad Dog Jones, Micah Johnson and others are currently being sold daily for record values. Such platforms help artists not only sell work but also protect paintings with digital signatures, i.e. NFTs. Christie's deputy chairman Xin Li-Cohen, for example, has co-founded nascent market platform TR Lab.
NFT artist Chris Torres explains how crypto art opens up opportunities for artists that had been unavailable before, saying, "The creator originally owns it, and then they can sell it and directly monetize it, and have recognition for their work."
Li-Cohen, who has led Christie's auction house since 2010, has recently onboarded a dedicated production team for working with artists and helping them issue digital works of art in NFT format. An additional concierge service has also been hired for ushering and supporting both communities and collectors along their client journey through the innovative digital-collectibles market.
Museums are also turning from physical to digital exhibitions, meaning that a Picasso painting exhibited in the Louvre can now be owned by a private collector, while leaving the original in the museum to be enjoyed by millions.
NFT's future prospects
Society is slowly making the transition from physical media to fully virtual experiences, with the younger generation already accustomed to holding digital collectibles as a store of value. NFTs can also help revolutionize copyright control, as radio stations can use tokens to obtain rights to broadcast music tracks, while streaming services may find it easier to buy rights to films and TV series.
Operations with NFT tokens are cheaper, easier and faster than with the real objects they are tethered to. Considering the applications of NFTs and the forecasts made based on existing statistical and market sales data, 2021 is promising to be a milestone in the development of this digitized trend.
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