What Are NFTs? Explained!
Non-Fungible Token (NFT), in its shortest definition, is a unique digital asset. It represents many digital assets that are unique, from collector’s items to virtual shoes, from virtual game content to digital properties.
NFTs are produced using blockchain technology, mostly with Ethereum token standards. However, unlike cryptocurrencies, they are not traded in Ethereum’s ERC-20 standard, but in ERC-721 and ERC-1155 standards.
With the technological innovations of our age, having digital products has become widespread among people and more than 174 million dollars have been spent on NFTs since 2017. The supply-demand balance ensures that prices are determined in NFTs, as in all assets with value. Due to the uniqueness of NFTs, the products sold are considered collectibles and their value is very high.
What Makes NFTs Valuable?
The fact that all NFTs contain unique information and are easily accessible reveals the advantages of having a product digitally compared to a physical product with collectible value.
It prevents the production and reproduction of counterfeit products and ensures that all information about the originality of the digital asset, from the previous owner and manufacturer, is available.
Unlike crypto assets, NFTs are not interchangeable. The fact that each is unique ensures that each has distinct characteristics and prevents two entities from being equivalent.
NFTs might think of it as a football game ticket. All tickets are unique, as each ticket will contain different stadium and date, teams to watch, seat location and personal information of the person who bought the ticket, and will provide the owner with an unmatched view of the stadium, and therefore, it is not possible to exchange tickets in an equivalent way.
NFTs also allow artists to produce. It enabled the production of digital works to become widespread by delivering their works to all over the world, and made it possible to bring together buyers and producers more easily by avoiding intermediary institutions.
In addition, in the event that the purchased work changes hands, the rights of the artist are protected with the copyright details, and the producer is ensured to have a share in the subsequent exchanges.
For example, actor William Shatner processed digital cards consisting of his own photographs and sold these digital photographs. If these cards change hands, they get a share as a producer.
Some of the other features of NFTs are; All of them have a specific area – The content purchased for one game cannot be used in another game – the products cannot be duplicated and fragmented, there is no deletion or change because they are processed on the blockchain and with smart contracts, and the authenticity of each product is transparently displayed. that it is controllable.
High Value NFT Examples
Alien#2089, a character belonging to the CryptoPunk game, one of the first produced NFTs, was sold in January 2021 for 605 Ethereum. The value of the “Dragon” character in the game CryptoKitty is 600 Ethereum.
The “1-1-1” race car in the F1 Delta Time game was sold in May 2019 for 415.9 Ethereum (4.440.000 TRY at the current price of 27.02.2021).
The highest-value NFT sale to date has achieved “Everydays: The First 5,000 Days”, which crypto artist Beeple has auctioned at Christie’s. The artifact was the first NFT to be sold in a historic auction house and marked a new institutional legitimacy for the emerging market.
The digital artwork in jpg format, a compilation of Beeple’s 5,000 pieces, was sold for $69.4 million (approximately 550 million Turkish lira) after the auction started on February 25.
