{"id":2472,"date":"2022-02-18T00:00:00","date_gmt":"2022-02-18T00:00:00","guid":{"rendered":"https:\/\/xcoins.com\/nfts-what-are-they-and-why-are-they-so-popular\/"},"modified":"2023-08-29T11:26:50","modified_gmt":"2023-08-29T11:26:50","slug":"nfts-what-are-they-and-why-are-they-so-popular","status":"publish","type":"post","link":"https:\/\/xcoins.com\/en\/blog\/nfts-what-are-they-and-why-are-they-so-popular\/","title":{"rendered":"NFTs: What Are They And Why Are They So Popular?"},"content":{"rendered":"\r\n<p><em>From street art to unreleased songs and even artificial intelligence, NFTs are capturing the limelight. But what exactly are they and why are they so popular?<\/em><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">As the cryptocurrency market and decentralised technology space <\/span><a href=\"\/en\/blog\/bitcoin-a-trillion-dollar-baby\/\"><span style=\"font-weight: 400;\">see a surge in demand<\/span><\/a><span style=\"font-weight: 400;\">, one particular area that is certainly booming in 2022 is <\/span><span style=\"font-weight: 400;\">non-fungible token (NFT) art<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n<p><a href=\"https:\/\/nonfungible.com\/market-tracker\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Data<\/span><\/a><span style=\"font-weight: 400;\"> from NFT market analyst, NonFungible, consistently shows growth. Since NonFungible began recording the data in 2018, the total spent on NFTs to date stands at $480 million <\/span><i><span style=\"font-weight: 400;\">(as of February 2022). <\/span><\/i><span style=\"font-weight: 400;\">Indeed, the data suggests the \u201cNFT craze\u201d is actually rather recent. In 2021, the <\/span><a href=\"https:\/\/www.nytimes.com\/2021\/03\/11\/arts\/design\/nft-auction-christies-beeple.html\"><span style=\"font-weight: 400;\">first NFT artwork<\/span><\/a><span style=\"font-weight: 400;\"> to be sold at a major auction house closed at $69,346,250 during an online auction by Christie\u2019s.<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">But<\/span><span style=\"font-weight: 400;\"> what exactly are NFTs<\/span><span style=\"font-weight: 400;\">, and why are they becoming so popular?\u00a0<\/span><\/p>\r\n<h2><b>What are NFTs?\u00a0<\/b><\/h2>\r\n<p><span style=\"font-weight: 400;\">A <\/span><span style=\"font-weight: 400;\">Non-Fungible Token (NFT)<\/span><span style=\"font-weight: 400;\"> is a unique cryptographic object that exists on a blockchain.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Uniqueness<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">NFT\u2019s uniqueness comes from the unique data attached to each <\/span><span style=\"font-weight: 400;\">NFT<\/span><span style=\"font-weight: 400;\">, meaning they can be distinguished from one another and can\u2019t be exchanged like-for-like. Their uniqueness is also precisely what gives them their value.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">This data could be anything. From a string of binary (e.g. 1010101001001001\u2026) to the complete works of Shakespeare. <\/span><span style=\"font-weight: 400;\">NFT <\/span><span style=\"font-weight: 400;\">data can also include images such as PNG or JPEG files.\u00a0<\/span><\/p>\r\n<h3><span style=\"font-weight: 400;\">Non-fungible<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">Crucially, <\/span><span style=\"font-weight: 400;\">NFTs<\/span><span style=\"font-weight: 400;\"> are not fungible. Put simply, this means they are not mutually interchangeable and typically cannot be broken up into smaller pieces like cryptocurrencies, further solidifying their value. Indeed, it is both the latter and the trait of non-fungibility that make NFT-art attractive.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">Artists can store images of their pieces on unique, indivisible <\/span><span style=\"font-weight: 400;\">NFT<\/span><span style=\"font-weight: 400;\">s and sell them globally in a matter of seconds. However, artists can also create digital art directly onto these <\/span><span style=\"font-weight: 400;\">NFTs<\/span><span style=\"font-weight: 400;\">. These create completely unique pieces that only exist in NFT-form.<\/span><\/p>\r\n<h3><span style=\"font-weight: 400;\">NFTs<\/span><span style=\"font-weight: 400;\"> vs Crypto: What\u2019s the difference?<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">The main difference is that cryptocurrencies like Bitcoin (BTC) are cryptographic assets that have no unique attributes. This means each of the 19 million BTC in existence is the same as every other BTC and they can be divided into infinitesimal fractions. Accordingly, if one BTC was swapped for another, nobody would notice, but just like NFTs, a bitcoin can\u2019t be copied.\u00a0<\/span><\/p>\r\n<h2><b>Examples of NFTs<\/b><\/h2>\r\n<h3><span style=\"font-weight: 400;\">CryptoKitties<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">The most famous <\/span><span style=\"font-weight: 400;\">example of NFT-based digital art <\/span><span style=\"font-weight: 400;\">in the cryptocurrency space is CryptoKitties. CryptoKitties is a feline-themed game, with individual cat-themed NFTs (known as CryptoKitties) at the core. Each is unique in appearance, having certain unchangeable characteristics.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">Whilst seemingly trivial, at the height of their popularity in 2017, individual CryptoKitties were selling for as much as 600 Ethereum (ETH), worth $170,000 at the time. Now, however, that large price tag is even higher, at $1.1 million at current market prices.<\/span><\/p>\r\n<h2><span style=\"font-weight: 400;\">NFT Art in Pop Culture<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">Today, unique replicas of famous artists\u2019 pieces are being turned into NFTs.<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">In early 2021, <\/span><a href=\"https:\/\/beincrypto.com\/banksy-art-piece-ablaze-replaced-nft\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">NFT art<\/span><span style=\"font-weight: 400;\"> made history<\/span><\/a><span style=\"font-weight: 400;\"> as a piece by pseudonymous British artist Banksy, was purchased and immortalised as an NFT, before being incinerated. Accordingly, the only copy of the piece now sits on a blockchain. The piece reportedly sold for $100,000, but will almost certainly attract more in its new form.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">NFTs <\/span><span style=\"font-weight: 400;\">have also made their way into music. Rapper Torey Laez <\/span><a href=\"https:\/\/forj.medium.com\/tory-lanez-debuts-unreleased-music-via-nfts-powered-by-bondly-99582f980242\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">debuted three songs<\/span><\/a><span style=\"font-weight: 400;\"> on his much-anticipated album \u201cPlayboy\u201d as NFTs using a marketplace built on DeFi platform, Bondly Finance. The artist followed in the footsteps of DJ 3lau, who recently sold an NFT collection of his music for over $11 million. <\/span><a href=\"https:\/\/www.rollingstone.com\/pro\/news\/kings-of-leon-when-you-see-yourself-album-nft-crypto-1135192\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">This month the Kings of Leon released a tokenised album<\/span><\/a><span style=\"font-weight: 400;\"> generating at least $1.45M, or 820 Ether, in sales in its first five days<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">The artists themselves benefit by being able to sell directly to fans, therefore avoiding the fees paid to labels and receiving more of their music\u2019s value.<\/span><\/p>\r\n<p><a href=\"https:\/\/cyberscrilla.com\/10-nft-projects-and-artists-to-watch-in-2022\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">In 2022, NFT enthusiasts need to keep a watch out<\/span><\/a><span style=\"font-weight: 400;\"> for more <\/span><span style=\"font-weight: 400;\">NFT art<\/span><span style=\"font-weight: 400;\"> and projects that can yield a great profit as well as contribute to this innovative art industry.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400;\">Are NFTs a good investment?<\/span><\/h2>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\">\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-3982 size-full\" src=\"https:\/\/xcoins.com\/wp-content\/uploads\/2022\/02\/Cryptoart-1.jpg\" alt=\"an illustration of an nft with crypto art written on top of it\" width=\"1100\" height=\"619\" srcset=\"https:\/\/xcoins.com\/wp-content\/uploads\/2022\/02\/Cryptoart-1.jpg 1100w, https:\/\/xcoins.com\/wp-content\/uploads\/2022\/02\/Cryptoart-1-300x169.jpg 300w, https:\/\/xcoins.com\/wp-content\/uploads\/2022\/02\/Cryptoart-1-1024x576.jpg 1024w, https:\/\/xcoins.com\/wp-content\/uploads\/2022\/02\/Cryptoart-1-768x432.jpg 768w\" sizes=\"(max-width: 1100px) 100vw, 1100px\" \/><\/p>\r\n<\/figure>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Just as art <\/span><span style=\"font-weight: 400;\">investors<\/span><span style=\"font-weight: 400;\"> make it a point to invest in popular works by world-famous artists, so should you <\/span><span style=\"font-weight: 400;\">if you want to invest in NFT art.<\/span><span style=\"font-weight: 400;\"> Art will never die and <\/span><span style=\"font-weight: 400;\">NFT art<\/span><span style=\"font-weight: 400;\"> is certainly a popular and unique form. <\/span><span style=\"font-weight: 400;\">The value of investing in NFTs <\/span><span style=\"font-weight: 400;\">stems not only from the value conferred by their scarcity and uniqueness but by the application of those features to popular aspects of social culture.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">Which football fanatic wouldn\u2019t want to own the only official digital copy of their favourite player\u2019s likeness? Which music fan wouldn\u2019t want to own the only unique copy of an unreleased piece of music from their favourite artist?\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">Moreover, novel uses of <\/span><span style=\"font-weight: 400;\">NFTs<\/span><span style=\"font-weight: 400;\"> are making headlines everywhere. From <\/span><a href=\"https:\/\/beincrypto.com\/nba-top-shot-nft-sales-surpasses-cryptokitties\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">commemorating famous sportspeople or events<\/span><\/a><span style=\"font-weight: 400;\"> to <\/span><a href=\"https:\/\/www.nasdaq.com\/articles\/immutable-calls%3A-ap-election-2020-results-will-be-recorded-on-a-blockchain-2020-10-15\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">notable events in political history<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">One of the most technically impressive immortalisations of digital art in this form comes from the 0xmons project. They use something called a generative adversarial network (GAN) to create pixelated figures, embedded in NFTs. A GAN is a tool that uses artificial intelligence to predict what real-life objects would look like. They are used in facial recognition technologies, as well as the more nefarious \u2018deepfakes\u2019.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">These kinds of use-cases for NFTs turn heads and keep their value driving higher, which is perfect for NFT investors. And with weekly revenues of $50 million, the number of NFT investors is growing daily. Will you take the leap?<\/span><\/p>\r\n<h2><span style=\"font-weight: 400;\">FAQs<\/span><\/h2>\r\n<h3><span style=\"font-weight: 400;\">What are NFTs?<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">NFT stands for Non-Fungible Token. It derives value from the unique data attached to each NFT and the fact it is non-fungible. Non-fungible means they are not mutually interchangeable and typically cannot be broken up into smaller pieces like cryptocurrencies. This further solidifies their value.\u00a0<\/span><\/p>\r\n<h3><span style=\"font-weight: 400;\">What is an example of NFT?<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">CryptoKitties is a feline-themed game, with individual cat-themed NFTs (known as CryptoKitties) at the core. Each is unique in appearance, having certain unchangeable characteristics.\u00a0<\/span><\/p>\r\n<h3><span style=\"font-weight: 400;\">Who are some famous artists that are publishing NFTs?<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">Banksy, Kings of Leon, DJ 3lau and rapper Torey Laez have all released projects as NFT art.<\/span><\/p>\r\n<h3><span style=\"font-weight: 400;\">Are NFTs a good investment?<\/span><\/h3>\r\n<p><span style=\"font-weight: 400;\">As of early 2022, the total value of NFTs sold stands at $480 million and is set to keep growing. However, the value of individual NFTs relies on them maintiaining their popularity and that is far from guaranteed. It\u2019s NFTs uniquness that sets them apart from crypto, but that also increases the risk factor. While the gains some have seen from investing in NFTs are huge, the risk is harder to understand. If you are new to the crypto space then <\/span><a href=\"\/en\/blog\/a-beginners-guide-cryptocurrencies-to-invest-in\/\"><span style=\"font-weight: 400;\">buying and holding crypto<\/span><\/a><span style=\"font-weight: 400;\"> may be the safer bet.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">As always, this article does not constitute financial advice and you should be sure to do your own research and consult a professional financial advisor before making any investment decision.<\/span><\/p>\r\n<p><em>To stay up to date on all things crypto, like Xcoins on\u00a0<a href=\"https:\/\/www.facebook.com\/xcoinsofficial\" target=\"_blank\" rel=\"noopener\">Facebook<\/a>, follow us on\u00a0<a href=\"https:\/\/twitter.com\/realxcoins\" target=\"_blank\" rel=\"noopener\">Twitter<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.linkedin.com\/company\/54161996\/\" target=\"_blank\" rel=\"noopener\">LinkedIn<\/a>\u00a0and enter your email address at the bottom of the page to subscribe.<\/em><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>From street art to unreleased songs and even artificial intelligence, NFTs are capturing the limelight. But what exactly are they [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":1231,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[741],"tags":[511,537],"class_list":["post-2472","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-academy-category","tag-beginner","tag-nfts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What Are NFTs &amp; Should You Invest in Them? | Xcoins<\/title>\n<meta name=\"description\" content=\"NFTs have taken over the art and financial world in equal measure. What are NFTs and should you invest in them? 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