You may have heard of them, but you may not be exactly sure what they are. And if you have heard of them, you may have also heard of NFT’s like the 1 of 11 piece collection from Beeple which sold for exactly $69,346,250 on Christie’s. Yep! That’s $69.4 million in total. So IDK about you but I was able to bring up the artwork on Christies, inspect the element, grab the image URL and download the entire collection for free. But Ironically enough that’s not the point. The buyer has the real deal and what I have is worth absolutely nothing. So why you may ask? Why can the original digital art like this one, or any other artwork be sold for tens of thousands or millions? Especially when they can be so easily replicated or taken. Doesn’t make any sense or does it.
These are the questions that we’ll explore as we dive into the rabbit hole of blockchain cryptocurrencies and NFT’s. But first. What is NFT’s? These are Non-fungible tokens, cryptographic assets existing mainly on the Ethereum blockchain. Each work of art has a unique identification code and metadata. So Non-fungible means Non-replaceable it cannot be replaced or replicated. The token is the currency exchanged through the blockchain. Every transaction and exchange is seen publicly across the world. Everything can be seen traced and validated.
In essence, this is no different than a collector owing an original pair of Micheal Jordan’s game shoes. Or a collector owning an original painting from Jean-Michel Basquiat. We know the work of art is the real deal 1 of 1 and the artist or creator still maintains all the intellectual and creative rights to the creation. So like owning the pair of shoes or that Basquiat, the buyer is purchasing to own an original work of that particular artist or individual.
The cool thing is the artist will always get a cut of the sales as the NFT are sold and resold over time. This directly supports the creator that you admire. With that said this is a fairly new form of investing and is seen as speculative since it may or may not be sold at a profit or break even later on. Recovering your cost, making a profit completely depends on the buyer and the selling factor of the NFT.
Another benefit to the artist is that the artist retains ownership of reproductive rights. So even if you right-click the owner has rights to this as well.
Why would I buy NFT’s?
Outside of the bragging rights and social status that owning the real deal carries. These can be collected, adhering to a following to demand a price increase. But we’ll be focusing on buying and flipping for higher prices and holding to gain. So… flipping NFT’s. I again will say this is a very risky investment. If you are one of the special ones who purchased Logan Paul’s NFT cards worth tens of thousands to millions this can be a bit tough to recuperate your cost for reselling, or not. It all depends on the buyer and the socially constructed demand that gives it value.
my first NFT goes live in 1 hour, 3000 available, buyers entered to win one of three 1st Edition Pokémon Packs (~$40k) AND be flown out to LA for my box break on February 27th... let’s fkn go ?https://t.co/GzvnhPzNWO pic.twitter.com/HpL6QCxz9G
— Logan Paul (@LoganPaul) February 19, 2021
On the other hand individuals like Logan Paul who invest millions in NFT’s have been able to profit quite a bit making over $535k in profit over a single NFT.
speechless again
— Logan Paul (@LoganPaul) January 5, 2022
woke up this morning to see my @worldofwomennft sold for 200 Eth ($765k) to @thesandboxgame
$535k profit. normally id say probably nothing but this is probably something ? pic.twitter.com/JJytuWzOa8
If you like me and don’t have a spare $10,000 to buy an NFT you are in luck. My approach on the OpenSea is to buy NFT’s that are only worth a few dollars to thousands to make a decent profit. Thanks to the growing popularity many artists from around the world can sell their work as NFT’s to gain money over its life. That means not all NFT’s are going to carry a hefty price tag they’ll be much more in the realm of purchase due to its demand.
Maybe Fractional NFT’s?
Like buying fractional shares of a single high-priced stock or crypto. The same can be accomplished with these. Fractional Nft’s have been broken down to be sold into individual pieces. So when you purchase a portion of the NFT, you only buy a portion of its overall value. Just like buying a fractional share of Bitcoin. So imagine if you were a part buyer in a NFT that sold for over USD 3.2 million. That’s a big payout, right? More information on the Zombie CryptoPunk that had over 480 buyers when it was sold can be found in that link. If you do take part in something like this, you’ll receive tokens representing your share in the artwork. Sell that share for higher when the time arises.
Check out these platforms that allow you to do so.
Conclusion
Nft’s are fairly new and ever-growing in popularity. Creators and artists are making quite a living making a few hundred to millions for their single-piece artwork and collections. You can find almost an endless stream of success stories regarding the creation and sale of NFT’s just by googling NFT. More importantly, NFT’s aren’t just artwork. It can be just about anything (I mean anything!). They can be a tweet, post on any social platform, animated gif, video, image, website, app. If it can be created digitally and can exist on the blockchain it can become an NFT, including the very platform that you're reading this on.
This topic is so vast and complex I don’t want to cram it all into this single article. The advancement and evolution of digital ownership are ever-growing. The Metaverse, web 3.0, and yes the kodoverse is where it will have the greatest impact on creators in virtual sellers and buyers.
This is all new and it's only going to get crazier and better for everyone. But because it is new it inherits a wider variety of risks. And with that risk, this doesn’t mean that you shouldn’t join in on the craze and cash out on all the hype. With crypto, there is a risk, with stocks, bonds, futures, or even investing into a rental property. It all has risks. The fictionalization of NFT’s or so new I bet most reading this didn’t know you can even invest in fractional shares in these.
Create a crypto wallet if you haven’t done so already. Link your wallet to OpenSea & fractional.art and get started. Do a bit of research before you enter, but don’t overanalyze. Just do it. If you haven’t even started and crypto itself well then CoinBase & BlockFi will be a good place to get started.
