The Unbelievable World of NFTs
People are exchanging pictures of penguins and childish doodles for thousands and often hundreds of thousands of dollars.
A House or an NFT?
This squiggle sold two days ago for 235 ETH, that’s roughly $728,000 USD. And to be honest, it’s a bit more artful than the majority of NFTs you would find on the OpenSea marketplace (The most popular place to buy and sell NFTs).
I’m only now discovering the world of NFTs, non-fungible tokens, but like most, I’ve been hearing about them for a number of months without ever looking into them.
This was a HUGE mistake, the world of NFTs appears to still be in the gold-rush phase — with new NFT collections being minted seemingly every other day. But it’s clear that some are more reputable and have more promising futures than others.
The OGs
We’re all familiar by now with the most infamous NFT collection — CryptoPunks — these 10,000 unique 24x24 pixel images of various faces with different attributes were minted (aka created) back in 2017 and they represent the (nearly) first of their kind. There isn’t a single one of those 10,000 available to buy as of right now on OpenSea, giving you some idea of how precious they are.
However, there are several other NFT collections that also command astronomical prices. The second most expensive NFT collection is the Bored Ape Yacht Club, an NFT collection created just this past April.
The least coveted of the entire 10,000 piece collection currently costs a whopping 13.5 ETH or $43,000 USD. That’s essentially the price to pay to be part of this exclusive club. Having a Bored Ape apparently gives you access to different perks and other soon-to-be-released members-only content.
The large majority of collection type NFTs — with the exception of the artwork type NFTs like the squiggle cover image of this article — seem to be copying the Bored Ape Yacht Club NFT idea. Meaning, they pick an animal, like a lion, or a penguin, and they create a static cartoon image of the animal wearing different clothes and having different attributes that determine how rare the NFT is. For example, if only 1% of them have a red hat, then that NFT might be worth more than others.
Exceptions to this trite copy and paste NFT creation process seem to be on the rise. Meebits are one example, where they have parted with the 2D cartoon style image and have instead created a 3D computer rendered image of a cubistic humanoid character. There are other NFTs that have used a similar concept, but Meebits appear to be the most expensive and eminent.
Even more exceptional is the FLUF world NFT collection, which stands out in several ways. Not only is it a 3D computer-generated image, but the image is actually a GIF that creates the impression of a living and breathing NFT. It also comes with music, which the NFT is dancing in rhythm to. Overall, it seems to be a rather unique project as far as the more popular NFTs are concerned.
When It All Changed
My interest in NFTs all started to change when a close friend of mine started working as a software developer at an NFT startup. At first, I was intrigued to hear about how the development process worked. It was surprisingly similar to the type of development I was already doing — mostly full-stack JavaScript — with the one exception being that the “back-end” was not interfacing with your typical SQL or NoSQL database, but instead, it was the Etherium blockchain.
At this point, I was just mildly interested, but once his company’s NFTs were minted and sold out within an hour, it finally dawned on me just how profitable this industry could be. The NFTs were originally sold for around $250 dollars each, but a few days later even the least rare were selling for around ten times that price.
Suffice it to say that many people made a fortune by minting their NFTs cheap and then selling them off. My friend, to his chagrin, only minted a couple and has held them ever since, hoping to one day see prices on par with the other famous NFTs, perhaps that day will come. Or perhaps, because of so many new NFTs entering the space, they will be diluted to the point of being worthless. Only time will tell. Cheers!
