Are you still wondering what an NFT is? When you scroll through social media, whether it’s Facebook, Twitter, Instagram or TikTok, you must have seen many discussions or content related to NFT. It is often referred to as ‘The Next Big Thing’ and NFTs are expected to continue to grow and become more and more popular. In this article, Qoala will explain what NFTs are, the list of the most expensive NFTs in the world, NFT Malaysia and much more for you to know.
How Do NFTs Work?
2021 is the year NFT really explodes and becomes a worldwide concern. Many famous celebrities and athletes have started to get involved in the world of NFT. Among them, Justin Bieber, Lionel Messi, Eminem, Stephen Curry and many others. Malaysia is also not left behind in this NFT world with the presence of several NFT platforms receiving a warm welcome. More and more Malaysians are getting involved in NFT.
Non-Fungible token or better known by its glamorous name NFT is a digital token that allows you to sell and buy ownership of digital assets. Examples of NFTs are paintings, music, animations, GIFs, videos, cosmetics in video games, and concert tickets.
The meaning of “Non-fungible” is that it is unique and cannot be replaced by something else in the same category. The reason is that the value varies and the price depends on which buyer is willing to pay. Examples of non-fungible assets such as diamonds, paintings or land have their own uniqueness and their value can change.
Unlike “fungible”, it can be exchanged because the value is the same. For example, like bitcoin, one bitcoin equals one bitcoin or RM50 money equals RM50. Cryptocurrency is also one example of fungible. It means that if you change it, the value is the same.
Back to NFTs, as Qoala explained earlier, they are digital products or assets. Another thing you should know is that NFT is combined with blockchain technology. This blockchain allows digital information to be recorded and distributed but cannot be edited. This means that the digital asset that is owned is original and there is no added factor and so on.
If you want to easily understand how this NFT works, imagine that you have a digital art that has its own uniqueness and then you don’t expect it to go viral and attract a lot of attention. But it’s common for online drawings to be easily “stolen” and usually no credit will be given to you. So, with NFT, the artist’s artwork is protected and your digital art is considered a digital asset that has its own value.
4 Things to Know About NFTs
Now that you know what NFT means, now Qoala wants to share 4 interesting facts about NFT.
1. Why Are NFTs Expensive?
How can the value of an NFT be so high and some are willing to buy up to millions of ringgit? It’s like the price of a luxury house. So, who actually sets the price of this digital asset? NFT assets do not come with a price tag, so this means their value is purely speculative.
Meaning here, the value depends on the market, supply and demand. Simply put, it works like all other commodities, where there must be a demand for it to have value. Another factor that drives the value of NFTs is that they are exclusive and rare. This means that the seller can set the price of the artwork at will and the buyer who is willing to buy will pay that cost to gain ownership of this NFT digital asset.
NFT buyers do not acquire copyright, they are just attracted to the idea that they have a digital copy of the original. The NFT buyer has a few lines of code that prove he is the owner of a unique digital asset.
2. List of Most Expensive and Popular NFTs
Let’s take a look at some of the most popular NFT transactions and some of the most expensive in history so far. In 2021, Twitter Co-founder Jack Dorsey held an auction to sell the first tweet in Twitter history as an NFT. According to CNBC, the tweet was sold for $2.9 million (RM12.1 million) to an individual to own the tweet.
The original video of “Charlie Bit My Finger,” the iconic video that once went viral in 2007 was sold as an NFT for $760,999 (RM3.18 million). If you try to find this original video with almost 900 million views on Youtube, you will not find it because it has been removed from the platform. What you will find are only copy videos and not the original video.
“Disaster Girl” meme from Zoë Roth’s 2005 photo of a burning house in her neighborhood, sold in 2021 in an NFT auction for $500,000 (RM2.09 million).
Nyan Cat, an animation of a flying cat with a Pop-Tart that leaves a trail of rainbows, sold for about $590,000 (RM2.46 million).
You may remember that the 4 NFTs that Qoala shared above are quite expensive. If you want to compare it with the list of NFT art sold in 2021, the list of NFTs above might just look cheap. Here is a list of the 5 most expensive NFTs sold in 2021:
- The Merge: USD 91.8 million (RM383.5 million)
- Everydays – The First 5000 Days: USD 69.3 million (RM289.5 million)
- Human One: USD 28.9 million (RM120.7 million)
- CryptoPunk #5822: USD 23.7 million (RM99 million)
- CryptoPunk #7523: USD 11.75 million (RM49.1 million)
3. NFT Malaysia
What about the current NFT situation in Malaysia? NFT in Malaysia can be said to have grown rapidly. Furthermore, many marketplaces such as Pentas and TRART are available to facilitate local NFT transactions. This trend is expected to continue to grow and attract more Malaysians.
The variety of NFTs we see from local artists range from 3D animations, internet memes, to illustrations of our amazing cultural heritage. Many local artists who put the results of NFT art on the marketplace have received a good return of up to millions of ringgit.
Red Hong Yi has sold the work “Doge to the Moon” for RM325,000.
“Apes stand strong” by Katun which is part of the sale amounting to RM1.6 million.
If you want to know, you can also make money with NFT. How to make NFT? Briefly, how to make NFT and sell it is as follows:
- Create your own NFTs whether in the form of pictures, music, digital illustrations, gifs and so on. For example, you can use Adobe Illustrator to create digital drawings and you can make them unique.
- After you have prepared the digital assets, you need to choose a platform or marketplace such as Stage for you to upload.
- You need to use a suitable crypto wallet like Metamask and you also need to prepare crypto money. For example, platforms like Stage use BNB.
- Upload your digital asset and then you need to set the price of the NFT you want to sell.
4. Want to Buy NFT? Know the Advantages of NFTs and Disadvantages of NFTs
As with any other purchase of artwork, when you buy an NFT, you are making an investment. Are these NFTs a low or high risk type of investment? As with any investment, there are pros and cons to consider before investing your money in a digital masterpiece.
Advantages of NFTs
- There is a potential that the price will continue to rise and can be sold at a higher price.
- Opportunity for creators to generate a decent income
- Have digital ownership of something that is unique and cannot be replaced or found elsewhere.
Cons of NFTs
- Uncertain value because NFT buyers have no copyright, only ownership. The owner cannot prevent other copies on the internet platform.
- High NFT gas fees. This depends on supply and demand.
- Can lose NFT if the application or platform that stores your digital asset fails to function or its use is banned.
Like any other investment, NFTs have their own risks. If you want to get involved, Qoala advises you to increase your knowledge of investing, buying and selling on the NFT platform. If you were not clear before and did not know what NFT is, hopefully this article can help you to some extent to understand how NFT transactions and affairs are done.
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