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According to Forbes magazine, NFT is an acronym for the phrase “non-fungible token”, which is simply understood as a digital asset that represents objects in the world. Real-world artwork, music, in-game and video items, and more.
This NFT composite of 5,000 images by artist Beeple sold for $69.3 million.
With encryption, each NFT asset will have its own unique digital signature, so it’s unique, or at least a very limited number. Therefore, artwork or music, clips, etc. in NFT format cannot be copied or reproduced like digital content in the past, and includes integrated authentication, which serves as proof of ownership.
The global virtual asset market is booming
Therefore, there is another way for artists and content creators to monetize their products. For example, artists no longer need to rely on galleries or auction houses to sell their work, but can sell them directly to consumers as NFTs. In return for the buyer, the buyer receives not an actual painting on the wall, but a digital file. Additionally, artists can program into NFT assets to receive a revenue share when their work is sold to a new owner.
NFTs are booming in multiple areas
Alternatively, you can purchase NFTs related to in-game items, such as exclusive equipment for in-game characters.
Because the authenticity can be verified and the ownership is clear, the transaction of buying and selling NFT assets, especially artworks that are important to authenticity, is said to be more transparent. Sellers themselves can protect their intellectual property and enjoy the results even after selling to the first buyer.
Therefore, although it is encrypted based on blockchain technology (blockchain) like “virtual” currency (also known as digital currency – cryptocurrency), NFT has a higher “uniqueness”. For example, if all bitcoins have the same value, then every NFT is different.
NFT digital assets are bought and sold online, and most of them are traded in cryptocurrencies—primarily the Ethereum cryptocurrency. Therefore, to trade NFTs, buyers/sellers need a crypto account.
Although it began to appear in 2014, by 2021, NFTs will officially explode, not only works of art.
Many NFTs are worth millions or even tens of millions of dollars, which is confusing. Typically, in early 2021, just about 2 weeks after announcing the NFT auction as the world’s first tweet, then-Twitter CEO Mr. Jack Dorsey announced that the NFT had been sold for $2.9 million (~$70 billion). ) Vietnamese Dong). Also last year, an NFT image composed of 5,000 images taken by artist Beeple was sold by auction organizer Christie’s (UK) for US$69.3 million (over VND1.5 trillion).
However, the reality is that there is no basis for valuing most NFTs. Buying decisions in many deals are said to be largely based on buyer sentiment, with no specific pricing basis. Therefore, some NFTs cost only tens of cents, but there are also NFTs worth tens of millions of dollars.
In 2021, NFTs are fast becoming the dominant model for buying and selling digital art. As a result, according to Forbes, the NFT market will be worth a staggering $41 billion by 2021, a figure roughly equal to the total value of the entire global fine art market. However, the above $41 billion figure is for reference only and is not an official valuation.
In fact, NFT statistics on the real market transaction value vary between published data sources. The reason for this is that, depending on the statistical unit, monitoring data from different sources and exchanges can lead to different results.
Typically, in March 2022, CNBC cites a report by data firm Nonfungible.com (which tracks transactions via tie62 Ethereum) that the value of global NFT transactions will reach $17.6 billion in 2021, an increase of more than 210 times, compared to 82 million in 2021 Dollar. 2020. Meanwhile, in January 2022, Reuters cited a report by data market tracker DappRadar that NFT transaction volume in 2021 will reach about $25 billion. According to statistics from another unit, CryptoSlam, the global NFT transaction volume will reach $18.3 billion in 2021.According to the list Financial TimesNFT is becoming a “magnet” that attracts many financial and banking companies.
In the face of the rapid growth and prosperity of NFT, it is creating the attraction of participation for many companies in many different industries and fields, not only limited to artistic products, video clips, images, etc., global brands such as Starbucks, Coca-Cola… are expected to use NFT’s form a digital product. In particular, Coca-Cola plans to launch NFTs, which are costumes used by characters in virtual worlds, to incorporate Metaverse trends.
Not only that, but many companies offering resort services are also moving towards the NFT trend. Recently, in Vietnam, a resort service company signed a cooperation agreement with a blockchain technology partner to jointly develop NFTs. Therefore, both parties generate NFTs for each hotel stay, rental days on Airbnb, and related travel products. Such NFTs will be issued and traded on the exchange so that guests booking room and travel services can sell or exchange the dates and services booked through the exchange if they are unavailable.
Even entertainment works are released in the form of NFTs for “funding” or “equityization”. Typically, singer BinZ recently teamed up with Tuniver — the blockchain company that launched a collection of NFTs for BinZ’s new song, Don’t Break My Heart. Accordingly, the copyright of the song “Don’t Break My Heart” is divided into 4 different levels of NFT, and each level corresponds to 4 levels of copyright revenue sharing. This is a form of using NFTs to “equity” a work, where authors can quickly make some money from selling NFTs, and buyers can invest to find long-term gains.
However, there are also risks in the NFT market, and even “hot and cold” instability due to the lack of basic valuation basis, similar to the situation of virtual currency and digital currency. Recently, many NFTs have fallen rapidly.For example, according to the tableNew York Post, the NFT reserve price of the Bored Ape Yacht series dropped by 25% in just 1 week. Additionally, many have warned that NFTs could be at risk of a catastrophic price drop after the pandemic has not subsided.
According to the Ministry of Information and Communications, the Prime Minister designated the Ministry of Information and Communications at the end of March to chair the formulation of the National Digital Economy and Digital Society Development Strategy. Previously, in a report to the government on the formulation of a legal proposal for the digital technology industry, the Ministry of Information and Communications stated that the bill is very necessary, as a legal channel for the digital industry to continue to grow and develop more sustainably.
According to the experience of many countries and regions in the world such as China and the United States, in order to develop high-tech industries such as IT and digital technology, all countries have invested in the construction and operation of efficient computing centers. Major national and regional issues will help improve the country’s technological capabilities. At the same time, Vietnam has absolutely no regulations and policies to develop this important technological infrastructure.
NFTs sold at record prices
According to the “Growing Concerns” page updated to May 14, the most expensive NFTs ever made share common characteristics beyond regular images or videos.
The most expensive was The Merge, a self-proclaimed artist known as Pak in the NFT community, whose iconic work sold for $91.8 million in December 2021.
The second is Everydays – The First 5000 days by author Mike Winkelmann (aka Beeple), which sold for over $69 million in March 2021. The work includes 5,000 photos taken between 2007 and 2020.
In third place is an NFT called Clock, which represents the number of days WikiLeaks founder Julian Assange has been detained on computer hacking and other charges. The clock, made by Pak in collaboration with Mr. Assange, sold in February for $52 million, with the proceeds going to pay for Mr. Assange’s defense.
Additionally, NFTs sold for over $20 million, Beeple’s Human One sold for $28.9 million in November 2021, and Larva Labs Company (US)’s Cryptopunk #5822 sold for $23.7 million in February.