A Cryptocurrency Expert Explains NFTs – How Nonfungible Tokens Work And Where They Get Their Value
Nonfungible tokens prove ownership of a digital item – image, sound file or text – in the same way that people own crypto coins.
· Unlike crypto coins, which are identical and worth the same, NFTs are unique.
· An NFT is worth what someone is willing to pay for it, which can be a lot if the NFT is made by a famous artist and the buyer is a wealthy collector.
An attorney friend recently asked me out of the blue about nonfungible tokens, or NFTs. What prompted his interest was the sale of a collage composed of 5,000 digital pieces, auctioned by Christie’s on March 11, 2021, for a remarkable US$69 million. Mike Winkelmann, an artist known as Beeple, created this piece of digital art, made an NFT of it and offered it for sale. The bidding started at $100, and the rest of the auctioning pr...