What is NFT, and Why Does Elon Sell Them?

What is NFT, and Why Does Elon Sell Them?

Last Updated on April 1, 2021

There has been a huge surge of interest in the topic of NFT in recent weeks. The global trend has been pumped up by Elon Musk ( of course), who tweeted an announcement about an NFT song for sale in the NFT format.

What is NFT, and Why Does Elon Sell Them?

What exactly is that?

NFT is a Non-Fungible Token. It’ something like a certificate of authenticity.

It’s like a document confirming the authenticity of a work of art bought at an auction in real life. NFT does the same thing with digital assets.

NFT tokens authenticate the uniqueness of a file in GIF, JPEG, MP3 or other format. This technology creates a new standard of ownership for digital files that was not previously possible. NFTs can be bought, acquired, sold and even destroyed just like physical objects.

The process of converting content into NFT is called Minting. This creates a new item on the blockchain network that is permanently attached to that content, such as your image file.

Currently, there are very few restrictive rules on what can be converted into NFT. NFT content shops have digital art, songs, memes, recipes.
You don’t need to know much about cryptocurrencies to convert your product into NFT. You just need specialized services (shops), your crypto wallet and some Ethereum.

For example, an artist can register in a shop/auction, connect their wallet, upload their paintings, convert them to NFT, adding an internal commission of 10% to the token. Whenever their painting is resold, they will receive their due commission.

At the moment, the NFT market has an estimated turnover of $400 million. Here’s an example of a few notable deals:

  • Nyan Cat creator Chris Torres sold the original GIF file for $590,000;
  • Pokras Lampas sold a photo of his work for 2 million rubles;
  • Artist named Beeple sold a digital collage of five thousand drawings for $69 million, the most expensive NFT token so far.

Twitter CEO Jack Dorsey has put his first tweet up for auction. The bidding for this lot has reached $2.5m.

And what about Ilon? The maximum bid for his NFT song on NFT was $1,121,000.00 (625.64124552 ETH). But then Ilon tweeted that it wasn’t quite right and canceled the sale. His motives remain unclear, but more people have learned about the benefits of blockchain.

NFT technology is creating new rules of the game, opening up new opportunities for producers of digital content that can be turned into money. Have you created a song in MP3 format, drawn a funny meme or written a recipe book? Well, that can now be converted into NFT!

This article represents FXOpen Markets Limited opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Markets Limited products and services or as financial advice.

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