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What is an NFT
NFT (non-fungible token) in essence has many similarities to regular tokens, like Bitcoin or Ethereum. They are coded in a smart contract, and they can be easily transferred from a wallet to another.
But they have mainly two differences if we compare them to regular tokens: they are unique and they are indivisible (you canโ€™t have half an NFT). NFTs are not something new. First NFTs were created almost 10 years ago, but they have started gaining popularity lately. Just to put an example, you may have heard about Cryptopunks, that were minted in 2017. There were 10,000 unique punks created that were initially sold for just around $30 bucks, and nowadays you wonโ€™t find a single punk being sold for less that 1000 times that price. And the rarest punk was sold for over $7.5 Million USD.
"Everydays - The First 5000 Days" by Beeple artist. The most expensive NFT till date, sold for $69 Million USD
NFTs are considered as digital art, thatโ€™s why people are paying those crazy sums, as buyers are now holding not just a digital punk, but a little piece of history.
These NFTs are just collectables, digital art. They donโ€™t have any utility.
And this is so important, because the trend of NFTs with real utility has exploded this year, and we need to talk here about P2E (Play-to-Earn).
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