Memes, Tweets, and GIFs sell for Millions of Dollars: What is a Non-Fungible Token?

If you’ve read the news over the past few weeks, you’ve probably seen memes being sold for thousands of millions of dollars and other benefits of digital civilization. For example, the Deal With It meme was sold for $ 25,000, and a 10-second clip about Trump was sold for $ 6.6 million. Of course, questions arise. What’s all this? Do not panic, this is a new fashion. We will tell you how the digital art market appeared on the Internet, what is a non fungible token and what cryptocurrency has to do with it.

what is a non fungible tokens

Does anyone actually buy memes and gifs?

Yes. Strictly speaking, everything goes under the hammer. Recently, a girl named Elona Musk sold four drawings for $ 5.8 million, and a gif with Nyan Cat was taken for half a million dollars. Finally, the Twitter founder posted his first tweet for $ 2.5 million, but has not sold it yet.

How does it work?

All of the sensational digital art purchase transactions combine three letters – NFT, which means “non fungible tokens”. Do not be surprised, now we will tell you what it is.

what is a non fungible tokens

Look, The standard record in a blockchain is called a token. Usually, all tokens are equal to each other and are fungible. You can exchange one for another, they will be the same. For example, how bitcoin works.

But NFT is non-fungible, and that’s why it differs from normal tokens. It exists only in a limited edition, like a collectible coin or card. Plus, non-fungible tokens are hard to tamper with or remove. Such a system works based on Ethereum, however, other cryptocurrencies have also begun to introduce something similar.

It is convenient to buy and sell digital items with nonfungible token. The seller can sell a limited number of goods – how many non fungible tokens he issues, so many will be purchased. The buyer will receive a digital original, which indicates that he is the owner of the gif with Nyan Cat.

what is a non fungible tokens

Let’s take a simple example. Suppose you are a musician, you’ve written an album, and you want to sell it cleverly – with the help of NFT crypto. You create ten of these tokens and put them up for auction. Buyers will receive your album digitally. That is, only ten people will own the album – the limited supply lies in the value. Obviously, if your name is Paul McCartney, then the cost of such an exclusive grows significantly.

If someone bought a GIF and a tweet, does he own them completely?

Not necessary. If Jack Dorsey sells his first tweet, it does not mean that he will disappear from the network. You can still see it, like it, and retweet it. Nobody forbids sending GIFs with Nyan Cat. Moreover, the buyer does not always have copyrights – the same creator of “Nyan Cat” kept them.

Why bother with half a million dollars for GIFs?

This raises a logical question – why does all this cost crazy money? Why do people pay them? The thing is that goods sold through nonfungible token are measured in units. There is only one token that proves ownership of the 10-second Trump video. No others. Yes, you can also download this video and post it on your social networks or blog, but you do not own it.

It’s like with traditional art – it’s easy to make dozens of copies of the Mona Lisa in varying degrees of closeness to the original. But only the original cost millions of dollars. After all, it is alone in the world, and others are not and will not be. A similar story with collecting: if people give thousands of dollars for Pokemon cards, why not pay for a clip?

what is a non fungible tokens

There is also another motivation. Since the current buyers of non fungible token art are people from the financial world, it is easy to assume that they will resell the assets later. Who knows how much will be offered for a 10-second video about Trump in 50 years? Maybe not $ 6 million, but $ 60? And where will the digital art NFT non fungible token market go? We may be on the verge of another revolution.

How do you feel about this non fungible tokens trend? Would you pay half a million dollars for a GIF, will this price increase tenfold?

About Ankeet Solanki

He started this blog as a hobby to show his affection for gadgets, but over the time this hobby became professional. And now he is working as a full-time blogger, but in free time he loves watching movies and games. PayPal donation for TechToyReviews will be appreciated.

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