In October 2020, Miami-based collector Pablo Rodriguez-Fraile spent nearly $ 67,000 on a 10-second video that he could watch for free online. Last week, he resold it for $ 6.6 million. The video by digital artist Biple (Mike Winkelmann) was authenticated using the blockchain, which served as a digital signature to confirm the originality of the work.
It is a new type of digital asset known as a non-fungible token (NFT). The popularity of such tokens skyrocketed during the pandemic.
Blockchain technology allows digital creations to be authenticated as one of a kind, unlike traditional online objects that can be reproduced indefinitely.
{ {1}} Rodriguez-Fraile notes that when he bought the video, he had already heard a lot about Beeple's work. According to him, the value of the video is precisely that it “cannot be exchanged and it is unique - unlike dollars, stocks or gold bars.
Examples of NFTs include, in addition to works of art, also sports cards , plots of land in virtual environments, or the exclusive use of a cryptocurrency wallet name, akin to fighting for domain names on the Internet.
OpenSea, a marketplace for NFT, said monthly sales rose to $ 86. 3 million in February, up from $ 8 million in January.
However, investors are warning that this market could represent a price bubble. As with many new niche investment areas, there is a risk of major losses if the hype dies down and opportunities for fraud may arise in a market where many participants operate under pseudonyms.
However, the auction Christie's has already launched its first digital art auction. A collage of 5,000 images, also created by Biplom, was put up for auction. Rates have already reached $ 3 million. Christie's will start accepting payments in Ether.
The NFT hype began with the launch of the US National Basketball Association's Top Shot website, which allows users to buy and trade NFTs in the form of game videos. Five months after launching the platform, it has more than 100,000 buyers, and its turnover reached $ 250 million. The NBA receives a fee for each sale.
Every item on the site has a "unique serial number with protected ownership, guaranteed by the blockchain." The largest transaction to date took place on February 22, when a user paid $ 208,000 for a video of LeBron James's throws.