In recent weeks, the art world has been abuzz with the news that a single digital artwork by the artist Beetle sold at Christie’s for $69 million. It was a record-breaking auction that also generated a lot of questions around what an NFT is, why it can hold value and how it works. But how does this all work? And, perhaps most importantly, how can you start buying and selling NFTs? We break it down below: NFTs are essentially a way for artists to sell their work in the digital space. Traditional art is one of a kind. You can’t just make another Mona Lisa, but in the digital world, if I copy and paste an image, there are now two copies of that image, which means the artist isn’t getting paid twice. That’s where NFTs come in. They allow the artist to give each digital copy a unique ID, creating scarcity that allows them to make money off their work multiple times over. In other words, this is probably how the art world will go forward with digital art moving forward.
NFTs can be used to crowdfund new projects, to monetize content and to buy and sell anything from video games to cars, art and more. The most popular NFTs are art, but they include other pieces of digital media like games, music, clothing and accessories. As more people start to take notice of this new trend, the value of NFTs continues to grow. Which has the potential to make virtual items more valuable than their real-world counterparts. NFTs are purchased and sold online, usually with cryptocurrency. They generally have the same software used in numerous cryptos. The value of NFTs is determined by its demand in the market. The more an artist creates their work, the more their portfolio will be worth. NFTs are fungible, meaning that they can be traded for other assets that have a similar value. This feature makes them perfect for trading and investing.