What Are NFTs And Why They Are Selling For Millions

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You might have seen stories and news about how digital artworks are being sold by the millions on the internet. If you have seen or heard about this then you might also have heard about the term NFTs or Non-Fungible Tokens. If you’re still reading then that means you’re interested in understanding what an NFT is. So that’s what we’re going to do now.

NFTs didn’t really have traction before 2021, you could blame the pandemic for it or you could blame the rise in cryptocurrency for the popularity of NFTs but in the end, both situations had a hand in it. NFTs are the latest craze from the world of cryptocurrency and blockchains.

The first-ever NFT artwork sold for over $69 million at Christie’s auction house, that’s a lot of money for artwork. Likewise, digital artist Pak also sold artworks for $16.8 million at Sotheby’s. Now, what do these buyers get for buying NFT artworks? The answer is: nothing physical. They don’t get the ‘original artwork’ as these are digital works so there isn’t really an original copy.

What they do get is alleged ownership of the artwork. Kind of like a statement saying that this artwork belongs to me. The NFT they get acts like a unique digital token that can be thought of as certificates of ownership for virtual assets. A fungible asset is something that can be exchanged for money easily using physical means. If something is non-fungible it means that it can’t be sold or interchanged. Not anymore though.

NFTs only exist in digital form backed by a blockchain record that acts as a public ledger to verify the ownership status of the digital artwork attached to the NFT. It’s kind of like how artworks are sold physically instead people can still share it, meme it, or whatever but everyone knows who the artwork belongs to.

Did this article help? If you’re still confused feel free to ask questions in the comments.

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