Non-Fungible Tokens: What Are They? And What Are They Worth?

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This list of the most expensive NFT’s sold so far will blow your mind!

The concept of a non-fungible token has been around for some time, but most people had never heard of these tokens until 2021. The story begins at the Seven on Seven conference in New York City way back in 2014, when Kevin McCoy and Anil Dash, keen to prove (and demonstrate) the power of blockchain technology outside of the realm of cryptocurrency.

This token was a one off and had little practical use outside of their demonstration, so it could be argued this was a poor way of trying to prove their point. Yet, on the other hand, this was the first time that a non-fungible, tradable item had been given a blockchain marker. Using the NameCoin blockchain, a unique work of art had been attached to an unchangeable, unhackable, fraud-proof system of data storage.

By linking this artwork to a blockchain, McCoy and Dash had now created the first piece of crypto art. You could easily be forgiven for becoming confused at this point with all these highly technical terms. Just what is crypto art anyway? We’re going to do our best to shed some light on the most technical terms we have defined below.

Struggling to Understand? Here is a Brief Overview of Important Terms

– Non-Fungible
A unique item that cannot be replaced with something else. The dollar bills in your wallet are fungible because you can easily replace them with more dollar bills if you wanted to. On the other hand, if you have a one-of-a-kind trading card in your collection, you can be sure that nobody else has that same card (short of counterfeits or “re-productions”).

– Blockchain
The blockchain was invented as the backbone of the Bitcoin cryptocurrency first devised by Satoshi Nakamoto back in 2008. There have been many variants of this technology created during the 13 years since Satoshi first explained the concept in his white paper. We’ll just concentrate on the typical setup of a blockchain here.

A peer-to-peer network is used to publicly share a distributed ledger amongst a huge number of participants. All of these copies have to match at all times, and the clever part is that every block in the chain relies on the previous block remaining in an unaltered state. Each consecutive block therefore reinforces the validity of the one that came before it. There is no central “command and control” structure required to operate such a setup. Any attempt to change the content of a block is instantly identified because of the huge number of other copies of the ledger.

Whilst these blocks were originally intended to store details of currency transactions, they can store any information the creator of the blockchain wishes. A cryptographic hash of the contents of the block is created and it is this information which is used to verify that all copies of the block match, and that consecutive blocks in the chain are compatible with the blocks that came before them.

– Cryptocurrency
A digital currency that uses blockchain technology to confirm transactions without the need for a central authority such as a bank.

– Crypto Art
In much the same way that digital currencies have been created using the blockchain, so too have artworks. If you wish to research this topic further, some early examples of popular Crypto Art are CryptoKitties, CryptoPunks, Rare Pepe, CurioCards, and Dada.nyc.

The Most Expensive NFT’s Sold as of June 2021

And now the moment you have all been waiting for… how much are people actually spending on these things? The answer, I am sure, is going to shock you.

1. $69 million – Everydays – The First 5000 Days (20 Artworks by Beeple)
2. $16 million – Hashmasks – A collection of “Living” digital art collectibles created by over 70 artists
3. $7.58 million – CryptoPunk #3100 – An AI/algorithm generated pixel art image of an alien
4. $7.57 million – CryptoPunk #7804 – Once again, a computer generated pixel art image
5. $6.6 million – Crossroads – A dystopian art piece mocking President Donald Trump
6. $6 million – The “War Nymph” collection of artwork and music videos by Canadian artist Grimes
7. $2.9 million – First Ever Twitter Tweet – Posted by founder and CEO Jack Dorsey
8. $1.6 million – CryptoPunk #6965 – This computer-generated pixel art is supposed to be an ape this time
9. $1.5 million – Axie Infinity Virtual Game “Genesis” Estate (virtual property from the game Axie Infinity)
10. $1.25 million – CryptoPunk #4156 – Another AI attempt at drawing an ape using pixel art

With prices like these, there seems little doubt that NFT’s are here to stay, and look set to represent a significant chunk of annual spending within many digital economies very soon.

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