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What are NFTs and why are some value millions?
A digital-only artworkwork has sold at Christie's public sale house for an eye-watering $69m (£50m) - however the successful bidder will not obtain a sculpture, painting or perhaps a print.
Instead, they get a novel digital token known as an NFT.
The place Bitcoin was hailed because the digital reply to currency, NFTs are actually being touted as the digital answer to collectables.
But there are many sceptics who think it is all a bubble that is going to burst.
What's an NFT?
NFT stands for non-fungible token.
In economics, a fungible asset is something with units that can be readily interchanged - like money.
With money, you can swap a £10 note for two £5 notes and it will have the identical value.
Nevertheless, if something is non-fungible, this is impossible - it means it has distinctive properties so it cannot be interchanged with something else.
It may very well be a house, or a painting such because the Mona Lisa, which is certainly one of a kind. You may take a photo of the painting or buy a print but there will only ever be the one original painting.
NFTs are "one-of-a-kind" assets within the digital world that can be purchased and sold like some other piece of property, however they haven't any tangible type of their own.
The digital tokens can be thought of as certificates of ownership for virtual or physical assets.
How do NFTs work?
Traditional works of art such as paintings are valuable because they're certainly one of a kind.
But digital files will be easily and endlessly duplicated.
With NFTs, artwork will be "tokenised" to create a digital certificates of ownership that may be bought and sold.
As with crypto-currency, a file of who owns what's stored on a shared ledger known because the blockchain.
The records can't be cast because the ledger is maintained by thousands of computer systems around the world.
NFTs also can comprise smart contracts which will give the artist, for example, a cut of any future sale of the token.
What's stopping individuals copying the digital artwork?
Nothing. Millions of individuals have seen Beeple's art that sold for $69m and the image has been copied and shared dependless times.
In many cases, the artist even retains the copyright ownership of their work, so they can continue to produce and sell copies.
However the buyer of the NFT owns a "token" that proves they own the "original" work.
Some people compare it to purchasing an autographed print.
People are paying millions of dollars for tokens?
Yes. It's as wild as it sounds.
How much are NFTs worth?
In theory, anybody can tokenise their work to sell as an NFT but curiosity has been fuelled by recent headlines of multi-million-dollar sales.
On 19 February, an animated Gif of Nyan Cat - a 2011 meme of a flying pop-tart cat - sold for more than $500,000.
A couple of weeks later, musician Grimes sold some of her digital art for more than $6m.
It isn't just artwork that's tokenised and sold. Twitter's founder Jack Dorsey has promoted an NFT of the primary-ever tweet, with bids hitting $2.5m.
Christie's sale of an NFT by digital artist Beeple for $69m (£50m) set a new report for digital art.
However as with crypto-currencies, there are concerns about the environmental impact of maintaining the blockchain.
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Сайт: https://marketbusinessnews.com/buying-nft-tokens-should-you-invest/272738/
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