The price of bitcoin is certainly not the only thing worth watching in the world of digital currencies now. In recent weeks, “cryptocurrency” has spilled over into the so-called NFT market, which connects the world of technological fads with the art market – the abbreviation NFT stands for non-fungible tokens, literally translated as unmistakable tokens. In the case of the current trend, they can be imagined as digitized collectibles, or an unadulterated confirmation of their ownership. NFTs can also have a very primitive form, which will be discussed later.
A key feature and innovation in these cases is that both the digitized certificate and the collector’s item exist in a single copy. In addition, it is relatively easy to sell and store at the same time. The holder does not have to rely on any particular institution. All it takes is for the Ethereum blockchain to work without major problems, just like the last six years.
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“It is precisely this programmed rarity that is partly behind the rise in the price of the NFT to heaven. Investors may see the same deflationary mechanisms as bitcoins, which are capped at 21 million, explains Daniel Kuhn, author of the industry portal Coindesk.
However, the abstract description has very specific and for many people very bizarre contexts and practical implications. This week, for example, a group of technology enthusiasts appearing on networks under the pseudonym Burnt Banksy burned a “Morons” poster. According to Coindesk sources, the group paid $ 100,000 (2.2 million crowns) for it.
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The group’s motives include the joy of modern iconoclasm, as well as the effort to allegedly indirectly monetize the ashes from the burned poster and turn it into a lucrative NFT, a certificate of poster ownership registered in the Ethereum blockchain. The “digitized” poster is now available at auction . It ends on Sunday and during Friday afternoon the price climbed over 10 ethers (327 thousand crowns).
“If a work existed as an NFT and at the same time in its physical form, its value would lie primarily in its physical form. But if we remove it and suddenly it appears only as an unadulterated NFT, then this form of the work will be the real one, “argue members Burnt Banksy.
However, it is possible to earn decent money on the NFT even without a similar accompanying show. For example, blockchain certificates with Banksy-inspired works have recently been sold worth $ 900 thousand.
The buyer found over six thousand CryptoPunks, primitive pixel images that are stored in the form of a token, similar to the second most widespread ether currency in a special digital wallet. The average price for one piece reaches 11 ethers, ie around 360 thousand crowns.
Take a look at examples of NFT:
Youtuber Petr Mára also spent money on it. “This is the most expensive piece of art I’ve ever bought. It has a few kilobytes. It has a few pixels. And it cost 32 ETH (currently slightly over a million crowns). It cost a third a month ago. New Age. Is it a good investment or a failure? ”Wrote Mára on Instagram.
Thanks to Már and Banksy’s burners, the trend is graduating in a way, as it becomes known to the general public. However, the NFT market boomed at the end of last year. In December, its value achieved nearly $ 9 million, a threefold monthly increase.
Dictionary of cryptocon termsBlockchain – a public ledger in which data on movements in virtual currency or tokens are entered. It is distributed among a large number of mutually independent computers, which also verify the accuracy of the data contained in it. Therefore, there is no need for a central authority to be responsible for the data in the blockchain. Token – a virtual currency without its own blockchain, which was usually created only for the needs of one specific project. It works similarly to a token. DeFi – an abbreviation for decentralized finance, ie financial services that use blockchain and tokens. Due to their technological nature, they do not need classic central control in the form of a bank or office. Smart contract – a virtual contract written in the blockchain, which is automatically activated when the conditions of performance are reached. An example is the accrual of interest. Stablecoin – a virtual currency firmly pegged to the exchange rate of the dollar or other standard currency. As the name suggests, the main advantage is the stability of the value of these digital coins. |
However, the current NFTs are not a novelty in the world of digital currencies. Their predecessors were CryptoKitties, collectible pictures and at the same time a game in the style of Tamagochi or Pokémon, also connected to the blockchain Ethereum.
They were created four years ago. Among other things, the richer possibilities of exchanging individual tokens and the overall maturation of Etherea as a platform, which no longer serves only as an accounting book for transactions with the second most widespread cryptocurrent ether, contributed to the development of other similar projects.
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Among other things, loans and interest payments can be arranged through Ethereum. The disadvantage of the rich use of this blockchain is currently, among other things, large transaction fees exceeding an average of $ 10.
The solution is to bring the upcoming technological improvements of Etherea, but according to skeptics, their result is uncertain and, in extreme cases, can bring a critical error rate. In other words, it is relatively difficult to obtain a guarantee that Banksy’s poster will remain on the blockchain in the same functional form for 15 years.
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