Own your own NBA highlight, buy virtual land, collect digital kittens. There's millions of dollars flowing into NFTs, and the likes of Mark Cuban, Logan Paul, Nike, Louis Vuitton, and the NBA are getting involved.
Think of NFTs as digital collectibles; virtual artwork, trading cards, gaming items, and much more. NFT stands for non-fungible tokens, which is a fancy way of saying it's a unique online item that cannot be changed.
Last week I wrote about bitcoin and the blockchain technology that powers it. Well, NFTs are yet another way that blockchains are being used - to verify the ownership and authenticity of these digital collectibles. If you want to understand the technical side of blockchains better, you can read last week's newsletter.
- NBA Top Shot - The NBA has partnered with Dapper Labs to create an NFT platform that allows fans to buy, sell, and trade official NBA video highlights. A few days ago, a highlight of a LeBron James dunk sold for $208,000, and the platform has seen over $15 million in sales in just the past 24 hours alone.
- Christie's Auction - Beeple, a digital artist who has already made millions from selling his art as NFTs, is now the first artist to auction a completely digital artwork at a major auction house.
- Decentraland - A virtual world that allows you to purchase land, outfits, and more in-game in the form of NFTs.
What makes NFTs valuable?
Think about what makes a piece of art valuable in real life. Although I can print out a picture of the Mona Lisa, it still wouldn't be the original, and it definitely wouldn't be valuable. Owning and collecting is a whole different ball game. The nature of NFTs being solidified into the blockchain means they can never be altered, duplicated, or destroyed, and the authenticity can be proven much easier than offline goods.
Just like anything else in life, people value what's rare.
We seem to be in the middle of an NFT craze. I believe most of these abstract digital collectibles selling for thousands of dollars will ultimately lose their value because they won't maintain relevance, but there will be a small number of winners. On the bright side, every day we're seeing more interesting use cases starting to crop up. The future of NFTs will be an exciting ecosystem to keep an eye on.
Side note - I can definitely envision a lavish version of myself having a digital frame on my wall showcasing my vast array of rare digital art..
Here are some of the popular NFT marketplaces to browse if you're interested: