Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Non-fungible tokens explained – and why some are worth millions

Non-fungible tokens explained – and why some are worth millions

Recently there have been reports of artworks selling for millions of dollars – but those who buy it aren’t getting anything physical – they are getting a unique digital token known as NFTs

If you’ve heard the word NFT, or the phrase non-fungible token, and not had a clue what was going on, you’re not the only one.

Before 2021 it was a relatively rare term to hear, but in recent months it’s becoming increasingly common to hear it spoken about in relation to digital artwork being sold for millions.

NFTs are the latest craze from the world of cryptocurrency.

Christie’s auction house sold the first ever NFT artwork for a whopping $69m (£50m) this week – but the winning bidder will not receive anything physical.

Similarly, an online sale of NFTs by digital artist Pak fetched a massive $16.8million (£12.2million) at Sotheby’s. This included an image of a single pixel for $1.26million (£987,000).

Chris Torres, creator of Nyan Cat, sold his iconic meme for roughly $590,000 earlier this year


Instead, they will get a unique digital token known as an NFT. Confused? Don’t worry, we will do our best to explain.

What is an NFT?


NFT stands for non-fungible token, and is the latest cryptocurrency phenomenon to go mainstream.

In economics, a fungible asset is something with units that can be readily interchanged, like money. For example, you can swap a £20 note for two £10 notes and have the same value.

If something is non-fungible, it means that it has unique properties and can’t be interchanged with something else.


In relatively simple terms, NFTs are “one-of-a-kind” assets in the digital world, that can be sold like anything else.

NFTs can take the form of digital artwork, GIFs, tweets, virtual trading cards, music, virtual real estate and more.

They transform digital works of art and other collectibles into verifiable assets that can easily be traded on the blockchain.

These digital tokens can be thought of as certificates of ownerships for virtual or physical assets.

How do NFTs work?


No physical object changes hands, because NFTs exist exclusively in digital form.

As with crypto-currency, a blockchain (digital record) acts as a public ledger to verify ownership status.

Critics argue that these digital works can be copied and shared, and experts say that this is no different than to in the physical world.

A copy of any artwork is not the original.

The buyer of an NFT owns a “token” which proves only they have the “original” work.

Why are NFTs worth so much money?


In theory, anyone can tokenise their “one-of-a-kind” work as an NFT.

Art-collector Pablo Rodriquez-Fraile thinks the NFT boom has been accelerated by the coronavirus pandemic, but that ultimately it would have happened anyway.

He told Insider: “People have long used art to store value. Crypto extends easily into digital art.

“This is just a more modern approach to investing in art and using it like someone would use gold or bitcoin.”

Billionaire Mark Cuban told Insider that one of the reasons people pay so much is because NFTs are about scarcity.

He told Insider: “The buyer knows how many will be made and has blockchain proof of ownership.”

Experts who spoke to The Hustle also believe a boom in cryptocurrency in general has also generated interest in digital assets.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Asian Energy Security Tested as Strait of Hormuz Disruption Threatens Oil Supplies
Iran Sets Three Conditions for Ending Regional War as Diplomatic Efforts Intensify
Iran warns of $200 oil as forces target merchant ships in Gulf
Japan to Release 45 Days of Oil Reserves Amid Iran Conflict
Global Energy Agency Announces Record Release of 400 Million Barrels to Stabilize Oil Markets Amid Hormuz Disruption
U.S. and Israel Intensify Strikes on Iran as Conflict Expands to Lebanon and Gulf States
When the State Replaces the Parent: How Gender Policy Is Redefining Custody and Coercion
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
Nvidia posted better than expected results for the January quarter on Wednesday and forecast current quarter revenue above market estimates.
Ukrainian government intensifies pressure on Hungary and Slovakia with oil blockade
Britain’s Channel Crisis: Paying Billions While the Boats Keep Coming
Woman Receives Gift Card for Christmas – Discovers It Is ‘Worth’ 63,000,000,000,000,000 Pounds
United Nations Calls for Global Action Against Disinformation and Hate Speech Online
Tucker Carlson warns of an inevitable clash in Western societies over mass migration
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
Italy's PM Giorgia Meloni highlights record employment and economic growth
Chancellor Friedrich Merz Re-elected as CDU Leader, Opposes AfD Influence
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
Two teens arrested in France for alleged terror plot.
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Former President Yoon Suk Yeol Sentenced to Life in Prison for Abuse of Authority
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
German Chancellor Friedrich Merz calls for real name use on social media.
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
British Tourist Arrested at Hong Kong Airport After Meltdown and Vandalism
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
French District of Pas-de-Calais Introduces Immediate License Suspension for Drivers Using Mobile Phones
Volkswagen Targets €60 Billion in Cost Reductions as Sales Decline and Global Pressures Intensify
Eighty-Year-Old Lottery Winner Sentenced to 16.5 Years for Drug Trafficking
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Poland's President Advocates for Evaluating Independent Nuclear Weapons Development
Mayor of Serdobsk in Russia’s Penza Region Resigns After Housing Certificates Granted to Migrant Family Trigger Public Outcry
China’s EV Makers Face Mandatory Return to Physical Buttons and Door Handles in Driver-Distraction Safety Overhaul
UK Green Party Considering Proposal to Legalize Heroin for an Inclusive Society
OpenAI and DeepCent Superintelligence Race: Artificial General Intelligence and AI Agents as a National Security Arms Race
We will protect them from the digital Wild West.’ Another country will ban social media for under-16s
Heineken announces cut of 6,000 jobs due to declining beer demand
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
×