A Youtube video titled “Charlie Bit My Finger – again” that debuted in 2007 and scored over 900 million views is set to be taken down after the family that uploaded it sold the NFT or the Non-Fungible Token of the video for over three-quarters of a million dollar.
Many memorable videos, images, tweets, and other memorabilia are rapidly getting converted into an NFT. They are fetching record amounts of money from willing buyers betting on cashing in on the ownership.
Before we go any further, let us first flush out the concept of what an NFT is?
A Non-Fungible token is a crypto asset with a unique identity coded within and unique metadata that sets it apart from each other. In essence, then each NFT is unlike any other in a given cryptocurrency. Because of its uniqueness, an NFT cannot be traded or exchanged at equivalent value against another coin of that cryptocurrency.
This gold rush of capturing and selling memorabilia into NFTs has scored over half a million dollars for the infamous photo called “Disaster Girl,” a meme featuring Zoë Roth, in a photo taken in 2005 looking at a house on fire in her neighborhood. The same bidder, with the alias “3fmusic,” that had purchased Disaster Girl NFT outbid 11 active bidders last Sunday in a heated battle to acquire the “Charlie …” NFT that went on mainly between two bidders named “3fmusic” and “mememaster.” 3fmusic ended up with the NFT outbidding his competitors by $45,444.
The process of an NFT sale happens over a decentralized blockchain network, where the sale is recorded as a ledger entry into the shared ledger whose identical copies are stored onto each node of the network. The ledger entry, a permanent record of the acquisition, acts as a certification of authenticity is by definition immutable and cannot be erased or altered.
Creating NFTs and featuring them online for sale has become so profitable that the Canadian company called Dapper Labs, which was behind the well-known crypto kitties blockchain game, has created its platform for facilitating sales of NBA memorabilia called NBA Top Shot. The motivation behind the move was the abject failure of Ethereum Blockchain, where Cryptokitties was featured, which went down after only 10,000 subscribers flocked to an extremely viral virtual character trading game that clogged the network.
This development has created a boom for NFT development, resulting in introducing new programming tools, languages, and platforms every day. The Dapper Labs platform called ‘Flow’ attracts emerging NFT developers translating their skills from Ethereum and learning Cadence vs. Solidity smart contract languages.
The story of NFTs that began with Crypto kitties has been enormously lucrative for many artists and creators. For example, Nyan Cat, one of the cryptokitties that features a flying cat with a Pop-Tart torso, sold for roughly $580,000. And memorabilia such as the first tweet ever sent by Twitter’s CEO Jack Dorsey fetched over $2.9 million. Both the newfangled Flow platform and Dapper Labs have cashed in mightily via NFTs that have attracted over 800,000 users and generated over $500 million in sales for Dapper Labs.
The mainstay of the NBA Top Shot is NBA memorabilia combining two massive collectors markets of NBA and NFTs. An intersection between the crypto asset and collectible ecosystems represents a total sales of over $123 million, of which nearly $60 million was collected from over 67,000 users coming in during only one week in February 2021.
What is even more astonishing is the fact that the creator of these NFTs continue to get royalties on the NFT they’ve created long after their NFT has been sold to the original buyer through the resale of those NFTs on the secondary markets. The proof of which is exhibited in the case of the NBA Top Shot, where among the above state figures, only $6 million of the revenue was generated from direct sales of digital NBA collectibles from the Dapper Labs platform– the remainder was the result of being traded on the secondary marketplace.
The NFT marketplaces are opening up faster than one can explain what an NFT is, and both the investment and the scope are humongous. Just to give you a glimpse of how massive the market for digital art has become, another major franchise, Formula 1 racing, has also debuted its wares on the NFT front.
In a recent move, the Formula 1®, the motor racing championship, in partnership with Animoca Brands, has introduced F1 Delta Time. An Ethereum blockchain-based game, F1 Delta Time, set a record for virtual NFTs sales for cars, drivers, and other memorabilia it sells licensed under the Formula 1® flag.
During its initial sale of the game wares sold in the form of what the game calls crates, F1 Delta Time generated over US$364,000.
In conclusion, NFTs are and will remain one of the lasting mediums for investment in crypto assets.