One of the rarest available non-fungible tokens, or NFTs, is a small, pixelated image of a bearded man wearing dark sunglasses and a top hat and smoking a cigarette. By some estimations, it’s worth anywhere between $500,000 and $100 million.
Its owner, a Brisbane man called Daniel, is a prolific NFT collector and trader who boasts an extensive collection of digital art which, as well as the aforementioned pixelated facade from the CryptoPunk collection, includes abstract pieces, some colourful lions and apes and a version of Da Vinci’s Mona Lisa with billionaire Elon Musk’s face on it.
This sort of eclectic selection is common in the nascent NFT market, which has boomed during the pandemic alongside the cryptocurrency platforms that they rely on to function, as millions of young, usually male, investors have poured money into this new crypto-adjacent asset class in the hope of making a motza.
An example of a CryptoPunk NFT.Credit:Provided for use by owner
NFTs’ popularity has gained the attention of institutions such as auction house Sotheby’s, which sold $US100 million ($A140 million) of the digital tokens last year. Justin Bieber, Jimmy Fallon and Gwyneth Paltrow are all proud NFT owners. And it’s not just art: an image of a New York Times column, a screenshot of Twitter founder Jack Dorsey’s first tweet, a digital version of singer Shawn Mendes’ vest (which the owner can put on and wear while playing a particular online game) – all have been “minted” as NFTs and sold for thousands.
Meanwhile, new examples of NFTs’ uses are slowly emerging, including to buy digital real estate, trade video games collectibles and properly remunerate musicians.
But what exactly are NFTs? And why are they worth so much?
What’s an NFT?
A non-fungible item is, basically, unique. Your house key, your cat, your child’s drawing displayed proudly on the fridge are non-fungible – non-interchangeable for other…
