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What are NFTs
An NFT is a digital asset representing real-world objects like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
Although they’ve been around since 2014, NFTs are gaining notoriety because they are becoming an increasingly popular way to buy and sell digital artwork. The market for NFTs was worth a staggering $41 billion in 2021 alone, an amount that is approaching the total value of the entire global fine art market.
In February 2021, a 10-second video by an artist named Beeple sold online for $6.6 million. Around the same time, Christie’s announced that it would be selling a collage of 5,000 “all-digital” works by the Wisconsin-based artist, whose real name is Mike Winkelmann. It was put on a virtual auction block with a starting price of $100 — and on March 11, it sold for a staggering $69 million.
Beyond the high prices, observers found one other fact fascinating. In exchange for their money, collectors who buy Beeples don’t receive any physical manifestation of the artwork. Not even a framed print. What they do get is an increasingly popular kind of crypto asset called an NFT — a short for non-fungible token.