Nonfungible tokens appear to be an idea whose time has come. Originally developed for use with collectible trading-card games, NFTs can represent almost any unique asset. Outside of the gamer context, the first NFT to gain widespread popularity was probably CryptoKitties, which were released back in 2017.
CryptoKitties became so popular that at one time, CryptoKitty trading clogged the Ethereum network, setting records for transaction volume. NFTs have only grown in popularity since then, and have now been developed for a range of in-game assets, digital collectibles, unique artworks and more.
The “Non-Fungible Yearly Report 2020” demonstrates the phenomenal growth of NFT transactions, showing an increase in market capitalization of NFTs from $141.5 million in 2019 to $338 million in 2020.
This comment focuses on NFTs associated with creative works of art. At this point in time, by far the most famous of these is “Everydays: The First 5000 Days,” a work created by the digital artist known as Beeple. That work was auctioned off by Christie’s in the form of an NFT for an astonishing $69.3 million on March 11, 2020.
However, more affordable NFTs in images, paintings, photographs, songs, videos and other creative works are also being made available. For a recent example somewhat less eye-catching than Beeple’s sale, popular artist Grimes raised about $6 million selling NFTs based on 10 pieces, some of which have thousands of copies available. The sale included NFTs for 700 copies of two pieces consisting of a short video and original music for $7,500 each, as well as a single NFT for a unique video and accompanying original song that sold for approximately $389,000.
However, before anyone decides to get in on the action…